Risks of Finfluencing: AFM fines Illegal Asset Management
The recent fine imposed on a private individual illustrates that 'finfluencing' involves considerable risk and demonstrates that the temptation of a substantial commission is often too great to resist.
In November 2021, the Dutch Authority for Financial Markets (AFM) warned against Grinta Invest Limited for offering illegal investment services without the necessary license to operate as an asset manager. For many investors, Grinta Invest turned out to be a scam (see this press release).
The recent fine imposed on the individual is notable because it was for being complicit in the illegal activity of asset management. According to the Dutch supervisor, the individual collaborated with the illegal asset manager Grinta Invest to promote the company, attract investors, and encourage them to invest large sums. The individual also acted as a contact person and assisted with the registration process, making him complicit in illegal asset management.
Finfluencing as an affiliate carries risks, especially if one does not have the license to give investment advice. With this recent fine imposed by the AFM, being complicit in the act of illegal asset management is apparently also a possibility. Although the road is not too straightforward, as this must be proven based on the facts and must meet the “higher” requirements of 'complicit' under Dutch law. For the AFM, the individual's actions as an agent, his intensive involvement, and his position as a financial advisor were sufficient for the Dutch supervisor to qualify the offense.
Learn more:
EU Investor Protection: Important Warnings for Finfluencers on Social Media
Promoting Online Investing? Beware: FCA Targets Finfluencers
Looking for Expert Legal Advice?
I’m here to help you navigate the complexities of financial markets regulation. If you need specialized consultancy in Dutch and EU Financial Markets Regulation or looking for a compliance specialist, let's connect. Visit my services page or reach out directly. Don't forget to subscribe for insights that keep you informed and ahead of the curve.
Read more:
Sovereign wealth funds (SWFs) are gaining significant traction around the globe, emerging as powerful tools for governments to manage their financial reserves and invest for the future. Among these funds, the Public Investment Fund (PIF) of Saudi Arabia stands out as a crucial catalyst propelling the nation towards a new era of economic diversification and growth.