The scrutiny of Celebrity influencers' Social Media endorsements may help to reduce financial fraud scams

Financial fraud continues to rise year on year, the cost of living crisis will drive even more people to look for ways of enlarging their income and inevitably fall for fake investment opportunities presented to them. As the regulating authorities and law enforcement introduce measures to obstruct the methods fraudsters use to target victims, the fraudsters adapt their scams accordingly. 

The vehicle of social media has given the fraudulent brokers a platform where they can present their scams to thousands of people via Instagram through the practice celebrity endorsement where well-known celebrities or influencers promote a particular product or investment opportunity, often leading their followers to believe that the celebrity has a full understanding of the product or investment they are endorsing. Such endorsement may become less appealing following the fine of $1,26 million delivered to Kim Kardashian by the US Securities and Exchange Commission (SEC) for failing to divulge to her 225 million Instagram followers that she was paid $250,000 for promoting the crypto asset Ethereum Max.

Ms. Kardashian made it clear that she was not providing financial advice but went on to say that her friends were telling her about Ethereum Max tokens. The SEC Chair Gary Gensler pointed out that “…investing public shouldn’t confuse the skills of celebrities with the very different skills needed to offer appropriate investment advice…” 

Joanna Bailey, head of the banking and financial fraud litigation department, commented “The public recognise and trust the celebrities that endorse investment schemes and think that they have real involvement and understanding of the investment they are promoting.” Joanna further pointed out “Kim Kardashian is not the only celebrity to have promoted investments, Katie Price unwittingly endorsed a Forex scam. Urging members of the public who have no understanding of Forex or crypto markets to consider such investments is inappropriate and often leads them into financial scams resulting in losses”

Our lawyers in the banking and financial fraud litigation department keep ahead of the scams and the methods used to defraud unwitting investors. Giambrone & Partners now leads the field following our recent groundbreaking case where the High Court of England and Wales granted permission to serve notice of proceedings on persons or persons unknown in connection with two digital wallets over blockchain by a non-fungible token (NFT). The case was the second case in the world and the first case in Europe to serve Court papers as an NFT through blockchain and is particularly significant with regard to crypto scams due to the fact that the perpetrators are often anonymous. This method of service avoids the need for identity. 

The challenging economic climate currently being experienced will almost certainly lead to more people seeking out “get rich quick” investment schemes. Our lawyers in the banking and financial fraud litigation department strongly recommend resisting the temptation and point out that if you are told that you must take action immediately or the opportunity will go, it is almost certainly a scam. 

Joanna Bailey frequently leads the litigation against financial institutions involved in Forex/binary trading disputes, as well as cryptocurrency issues and regulatory investigations and has some considerable success in retrieving the funds lost in fraudulent investment schemes.

Joanna has developed a range of strategies both to find the assets of the individuals perpetrating the fraudulent schemes and restore the funds to our clients. As well as recognising culpability in the organisations facilitating (but not associated with the fraud), by failing to undertake adequate due diligence.

She is highly experienced in high-value out-of-court settlement negotiations and has in-depth knowledge of the Civil Procedure Rules as well as English common law.

If you think you have been targeted by a fraudulent investment broker please contact Joanna’s clerk Sam Groom on sg@giambronelaw.com or please click here.