UK: The Scrutiny Of Celebrity Influencers' Social Media Endorsements May Help To Reduce Financial Fraud Scams

[Gunnar Larson]

https://www.mondaq.com/uk/white-collar-crime-anti-corruption-fraud/1238238/the-scrutiny-of-celebrity-influencers39-social-media-endorsements-may-help-to-reduce-financial-fraud-scams?email_access=on


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
<https://www.sec.gov/> (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
<https://www.cnn.com/2022/09/15/business/kanye-west-gap-termination> with
the very different skills needed to offer appropriate investment advice..."

*Joanna Bailey,
<https://www.mondaq.com/redirection.asp?article_id=1238238&company_id=24606&redirectaddress=https://www.giambronelaw.com/site/people/profile/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
<https://www.mondaq.com/redirection.asp?article_id=1238238&company_id=24606&redirectaddress=https://www.giambronelaw.com/site/servicesforindividuals/forex-litigation-lawyers/>
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.

*The content of this article is intended to provide a general guide to the
subject matter. Specialist advice should be sought about your specific
circumstances.*
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