Social media 'finfluencer' breached Alberta's security laws, says watchdog
Jayconomics promoted companies without disclosing they'd paid him
A Canmore "finfluencer" broke securities laws by failing to disclose that he'd been paid to promote the stocks of four companies, the Alberta Securities Commission has ruled.
The commission issued its 22-page decision against self-proclaimed financial guru James Domenic Floreani, known on social media by his handle Jayconomics.
The province's securities watchdog found that Floreani was acting as a financial influencer — finfluencer — when he breached the Alberta Securities Act in posts to his YouTube, X and Patreon accounts.
Between November 2020 and March 2022, Floreani promoted four Canadian companies: Tenet Fintech Group Inc., Gold Mountain Mining Corp., Levitee Labs Inc. and Sekur Private Data Ltd.
Followers acting on recommendations
Those companies paid him, in total, over $100,000 for the sponsored content, according to the ASC.
At the time, Floreani's YouTube account had more than 50,000 subscribers.
Alberta's Securities Act requires anyone who is engaged in investor relations to clearly disclose when content is created on behalf of an issuer, which the ASC ruled Floreani failed to do.
"Such disclosure is important because it helps prospective investors assess the objectivity of the information presented," said the ASC in a statement.
"He made recommendations about purchasing certain securities to members of his audience, and the public comments on [Floreani's] posts demonstrated that viewers were acting on those recommendations."
No finance or investing experience
One of the titles of a Jayconomics YouTube video was: "This Stock EXPLODED to the NASDAQ."
The ASC noted Floreani did not have experience or formal education in finance or investing.
On his LinkedIn page, Floreani described Jayconomics as "a Canadian digital media company specializing in the creation of educational finance content with the goal of democratizing the financial landscape for all."
Floreani told investigators he was not familiar with securities law and was unaware that the posts should have included such disclosure.
Although the commission noted that ignorance of Alberta securities laws is not a defence, the ruling did state that Floreani's explanation "may be relevant to what sanctions are appropriate."
Health issues, threats
In its press release, the ASC recognized the growing trend of online finfluencers, noting that "not all information is provided by qualified individuals."
In his interview with ASC investors, Floreani said he stopped posting financial content in early 2022 after he and others lost money.
Floreani told investigators he found it difficult to deal with those consequences and said his health suffered as a result.
He also said he'd begun receiving threats online.
The ASC will now determine whether to impose sanctions or a cost-recovery order.
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