AFS licensees beware of finfluencers

By Selina Nutley

In the latest news about ASIC’s ongoing campaign to manage the regulatory difficulties created by social media influencers who discuss financial products and services online, often referred to as ‘finfluencers’, and companies that engage them for promotional reasons, the Federal Court has finally delivered its orders against Tyson Scholz after finding he had contravened Australian financial services laws.


Between March 2020 and November 2021, Scholz operated a financial services business online that provided training on trading securities listed on the ASX and ran various private online forums with the express purpose of discussing share trading. Scholz charged subscription fees to join his training courses, seminars, and online forums, with multiple subscription tiers available which entitled subscribers to different levels of trading information. Scholz would provide detailed advice and recommendations about trading ASX-listed shares.

In 2021, ASIC brought a proceeding in the Federal Court against Scholz, alleging his conduct contravened financial services laws; in particular, that he had carried on a financial services business without an AFS licence.

In December 2022, the Court found Scholz’s conduct required an AFS licence and therefore he had contravened financial services laws. Justice Downes observed, ‘the financial product advice given by Mr Scholz formed an integral part of this business. The advice which was given by him was not a one off but formed part of the continuous and systemic business operations by which Mr Scholz derived profit’. The Court postponed making final orders until a later date.

In April 2023, the Court made orders permanently restraining Scholz from hosting online groups for which a membership fee is charged, and where messages are exchanged by members about share trades, without an AFS licence. The orders also restrain him from carrying on a financial services business in Australia in contravention of the Corporations Act.

What does the decision mean?

ASIC’s prosecution of Scholz will unlikely be the last of its kind. Following the Federal Court’s decision, ASIC Deputy Chair Sarah Court publicly emphasised the harm of conduct such as Scholz:

Financial services laws exist for the protection of investors…the people who paid Mr Scholz to access private online forums where he made recommendations about shares, as well as those people who purchased shares on these recommendations, did not have the benefit of these protections.

It is clear ASIC is concerned about the impact finfluencers can have due to their enormous reach through social media and the typical audiences of finfluencers, who are often unsophisticated investors. This underscores why AFS licensees need to be careful when engaging finfluencers as part of their promotional activities.


ASIC has published an information sheet about discussing financial products and services online, which aims to assist finfluencers, and AFS licensees that may engage them, understand their obligations with respect to financial services laws.

We have previously written about the key precautions AFS licensees should take to minimise the risk of inadvertent misconduct when engaging finfluencers otherwise they risk significant penalties. Those precautions include the following:

  • Thoroughly complete due diligence and understand your obligation if a finfluencer is acting on your behalf (this means they are your ‘representative’ for the purpose of the financial services laws which trigger other obligations).
  • Use appropriate risk management systems.
  • Have sufficient compliance resourcing.
  • Consider the design and distribution obligations and whether you have taken reasonable steps to ensure only to promote the product to consumers in the target market.

Reach out to our team if you need to know more about your obligations.


Selina Nutley

Selina has extensive experience in all aspects of commercial litigation and dispute resolution.

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