The rogue 'finfluencers' pushing risky investments to young followers
Georgina Choleva/Spoovio
Social media is awash with glamorous users promising to help you get rich with savvy financial investments. But some so-called “finfluencers” lack proper licenses and may enrich themselves by promoting unauthorised brokers, Investigate Europe has found.
In one of James Pereira’s many Instagram videos, he cruises along the winding roads of Italy’s Amalfi Coast in a classic red convertible, sunlight glinting off his designer watch as he grips the steering wheel. Before this account was deactivated last month, Pereira’s feed was filled with luxury sports cars, infinity pools and designer clothes. He claims to have built his fortune in Portugal young, by his mid twenties, through smart financial investments and promising to teach his then 200,000 Instagram followers how to replicate his success.
Nowadays, social media feeds are awash with glamorous-looking profiles like Pereira’s that seem to offer an easy path to financial freedom. Above all, it is young people who look to “finfluencers” - a contraction of financial influencers - on how to invest their cash. Yet many social media personalities posting about finance lack formal qualifications or licenses to operate as advisors, and some even make kickbacks promoting investment products to their followers.
A 2024 survey by wealth management firm Charles Schwab found that 38 per cent of Gen Z had found financial information from YouTube, and 33 per cent had done so from TikTok. To would-be customers of finfluencers, the risk is real: research from British bank Barclays published earlier this year found that 42 per cent of people who had invested based on social media advice had lost money.
Worldwide, authorities are taking notice. Earlier this year, the UK Financial Conduct Authority (FCA) led what it called an “international crackdown” along with regulators from Australia, Canada, Hong Kong, Italy and United Arab Emirates to protect “social media users from illegal financial promotions by rogue finfluencers”. Fifty cease-and-desist letters were sent. Three men were subsequently charged in Britain, and now face fines or potentially up to two years imprisonment.
Many in the sphere act legitimately, the FCA noted, but others “tout products or services illegally and without authorisation through online videos and posts, where they use the pretence of a lavish lifestyle, often falsely, to promote success.”
Nowadays, social media feeds are awash with glamorous-looking profiles like Pereira’s that seem to offer an easy path to financial freedom. Above all, it is young people who look to “finfluencers” - a contraction of financial influencers - on how to invest their cash. Yet many social media personalities posting about finance lack formal qualifications or licenses to operate as advisors, and some even make kickbacks promoting investment products to their followers.
A 2024 survey by wealth management firm Charles Schwab found that 38 per cent of Gen Z had found financial information from YouTube, and 33 per cent had done so from TikTok. To would-be customers of finfluencers, the risk is real: research from British bank Barclays published earlier this year found that 42 per cent of people who had invested based on social media advice had lost money.
Worldwide, authorities are taking notice. Earlier this year, the UK Financial Conduct Authority (FCA) led what it called an “international crackdown” along with regulators from Australia, Canada, Hong Kong, Italy and United Arab Emirates to protect “social media users from illegal financial promotions by rogue finfluencers”. Fifty cease-and-desist letters were sent. Three men were subsequently charged in Britain, and now face fines or potentially up to two years imprisonment.
Many in the sphere act legitimately, the FCA noted, but others “tout products or services illegally and without authorisation through online videos and posts, where they use the pretence of a lavish lifestyle, often falsely, to promote success.”
Finfluencer James Pereira showcases his lavish lifestyle on social media. Instagram
In Portugal, Pereira has not been publicly charged with any crime. But he has twice been flagged by national securities regulator CMVM, for the first time in 2021 for a website called James Trading Jar.
One year previous, a poster identifying themselves as Maria Nunez commented on a blog, claiming to have lost €600 using one of Pereira’s sites. “Other [followers] said they invested €350 and they made €2000 in one month. I asked him if they were using different trading signals, because I kept losing money", the poster wrote, one of several comments denouncing the website.
After the first notice from the CMVM in 2021, Pereira’s social media accounts closed, but it didn’t take long for others to reopen. Last year, the regulator issued a second warning stating that Gonçalo Sousa Pereira, publicly known as James Pereira, was not authorised to act as a financial intermediary in Portugal, a violation that can be fined up to €500,000.
Today, Pereira is still actively on the lookout for new investors, operating a platform called James Trading Group. The first three months of James Trading Group’s “educational” services are free, but afterwards, they cost €99 a month, the website states. Investigate Europe followed the prompts from this website to join encrypted Telegram channels, where images purporting to show other participants’ earnings were shared.
To initiate the process, the James Trading Group requires users make a €350 deposit on its recommended trading platform, IronFx, promoted using affiliate links for people to click on. IronFx has been flagged by regulators in Malaysia, Spain, Canada, Brazil and Italy for offering unlicensed services. Some, but not all, of its associated domains have an EU license. For interested customers, IronFx offers up to $1,000 per month to those bringing in new clients.
For those looking for these kinds of investment opportunities, these types of offers can appear appealing, and a risk they might be willing to take.
One year previous, a poster identifying themselves as Maria Nunez commented on a blog, claiming to have lost €600 using one of Pereira’s sites. “Other [followers] said they invested €350 and they made €2000 in one month. I asked him if they were using different trading signals, because I kept losing money", the poster wrote, one of several comments denouncing the website.
After the first notice from the CMVM in 2021, Pereira’s social media accounts closed, but it didn’t take long for others to reopen. Last year, the regulator issued a second warning stating that Gonçalo Sousa Pereira, publicly known as James Pereira, was not authorised to act as a financial intermediary in Portugal, a violation that can be fined up to €500,000.
Today, Pereira is still actively on the lookout for new investors, operating a platform called James Trading Group. The first three months of James Trading Group’s “educational” services are free, but afterwards, they cost €99 a month, the website states. Investigate Europe followed the prompts from this website to join encrypted Telegram channels, where images purporting to show other participants’ earnings were shared.
To initiate the process, the James Trading Group requires users make a €350 deposit on its recommended trading platform, IronFx, promoted using affiliate links for people to click on. IronFx has been flagged by regulators in Malaysia, Spain, Canada, Brazil and Italy for offering unlicensed services. Some, but not all, of its associated domains have an EU license. For interested customers, IronFx offers up to $1,000 per month to those bringing in new clients.
For those looking for these kinds of investment opportunities, these types of offers can appear appealing, and a risk they might be willing to take.
“[Some] tout products or services illegally and without authorisation through online videos and posts, where they use the pretence of a lavish lifestyle... to promote success.”
— UK Financial Conduct Authority
Unlicensed brokers, unprotected investments
As recent FCA has action shown, authorities are growing increasingly concerned about influencers operating across social media, which are part of a broader phenomenon impacting citizens across the continent. Last year alone, online financial scams cost Europeans an estimated €4 billion, according to the European Commission. In Portugal, police estimate that victims in Lisbon and Porto lost about €50 million to scams, mainly pushed by influencers, between 2022 and 2024.
Pereira denied any allegations of wrongdoing after Investigate Europe reached out for comment, saying he does not provide financial intermediary services in Portugal and is in contact with the national regulator CMVM to “comply with the regulation and operate in transparency”. His Instagram account has now been deactivated.
Pereira also stated that his platform, IronFX, operates with a license from Cyprus, giving it the legal means to offer its services in Portugal under EU law. However, Investigate Europe found that the domain where James Trading Group directs users, ironfx.com, is not listed as authorised by the Cyprus Securities and Exchange Commission. Instead, it belongs to a company registered in the British Virgin Islands. Visitors in Portugal are able to freely access ironfx.com, although when Investigate Europe tried from some other EU countries, a message appears stating: "This website is not directed at EU residents and falls outside the European and MiFID II regulatory framework."
The absence of EU authorisation means that consumers have less recourse to report alleged wrongdoing and are less protected if an operator goes bankrupt, while companies are able to offer even riskier investment products.
Alongside Pereira, Investigate Europe identified another four finfluencers with a combined audience of more than 64,000 across Facebook, Instagram, TikTok and YouTube who promote a total of nine unauthorised brokers and crypto exchange platforms in Portugal.
There is no indication of criminal wrongdoing on Pereira’s part, but his business model points to grey zones in regulation that are easy to exploit.
Blurred lines between investment ‘advice’ and ‘opinion’
In the European Union there are clear laws requiring those offering professional financial advice to have a license. However, it is up to national authorities to specify which activities require a license, and not all “finfluencing” falls into this category.
Part of the ambiguity lies in what can be defined as legitimate activities - offering generic information and educating people about financial investments - and illegitimate ones. In Luxembourg, Belgium, Germany and Portugal, generic information on investment literacy shared online does not need to be regulated. Personalised advice, however, does.
Many influencers include disclaimers on their platforms stating their content is “intended solely for educational and informational purposes”. James Trading Group makes similar claims. However, as Isabel Pinheiro Torres, a lawyer specialised in financial law with the firm Abreu Advogados, explained, “if the platform is in fact providing a financial intermediation service, simply writing a disclaimer stating that it does not do so does not exclude responsibility.”
When it comes to combating questionable online investment, many regulators are only able to take preventive measures, such as flagging unauthorised activity. Only a handful have the power to systematically block fraudulent websites. Investigate Europe’s analysis of all the URLs flagged by Portugal’s CMVM in the past five years showed that despite this, half still remained open.
For Pinheiro Torres, the crucial issue is ensuring that clear rules exist and are implemented. “Regulation provides greater protection for investors,” she said. If finfluencers “are operating in a lateral manner, outside the law, it leaves a regulatory vacuum that is not good for investors and the market.”
Additional reporting: Ella Joyner
