Alberta’s securities watchdog found that a financial influencer broke securities laws by failing to properly disclose that he received payments from four companies in exchange for promoting their stocks on social-media platforms.
The three-member Alberta Securities Commission panel determined that James Domenic Floreani of Jayconomics Inc. engaged in investor relations activities by posting promotional content on behalf of four Canadian companies: Tenet Fintech Group Inc., Gold Mountain Mining Corp., Levitee Labs Inc. and Sekur Private Data Ltd.
Mr. Floreani posted videos and other content discussing those companies on various social-media platforms including YouTube, where he had 50,000 subscribers; X; and Patreon, where he had 2,000 paid subscribers. The companies paid him in cash or shares for the posts.
The next phase of the proceedings against Mr. Floreani will determine whether he faces any orders for sanctions or cost recovery, the ASC said in a news release Monday.
Canadian securities regulators are taking note of the growing popularity of financial influencers, known as “finfluencers,” who use social-media platforms to disseminate advice on investing and managing money.
The Ontario Securities Commission surveyed 655 Canadian retail investors and found that about 35 of per cent of them had made a financial decision based on advice from a finfluencer. The survey, which was published earlier this month, also found that those who had been influenced by a finfluencer were 12 times more likely to have fallen victim to a social-media scam.
“Finfluencers have a clear capacity to affect their audience’s behaviour, and this influence could diminish retail investor well-being – especially if the advice is poor quality,” Leslie Byberg, executive vice-president of strategic regulation at the OSC, said in a statement at the time.
Mr. Floreani and his lawyer did not immediately respond to a request for comment on the ASC panel’s April 24 decision.
Mr. Floreani started posting finance and investing content on social media under the user name Jayconomics in the summer of 2020.
He didn’t have any formal education in the field, aside from an introductory finance course at Concordia University and online learning through a platform called Udemy, Mr. Floreani told Alberta Securities Commission staff during his deposition on June 15, 2023. He told them that he got the idea of becoming a finfluencer from seeing others around his age posting videos about their investments.
During the deposition, Mr. Floreani said he was not aware that he was legally required to disclose his commercial relationships with the companies he discussed in his social-media posts.
“Such disclosure is important because it helps prospective investors assess the objectivity of the information presented,” the Alberta Securities Commission said in a news release.