- The UK financial regulator has warned TikTok users about taking stock tips from the app.
- The Financial Conduct Authority warned about “promising high-return investments,” per BBC News.
- One user posted videos with names like: “Only future millionaires can see this video!!”
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TikTok users were being warned about risky investment advice on the social app, BBC News reported.
The UK’s Financial Conduct Authority told investors should be wary of any advice promising high-return investments, the report said.
“There are risks with taking unregulated investment advice and we engage with social media platforms to have pages which breach our regulations taken down,” an FCA spokesperson told Cristina Criddle, a BBC tech reporter.
Social media has been flooded with investment advice in the last few weeks, as Reddit’s Wall Street Bets subreddit banded together and fueled sky-high returns on GameStop, AMC, and other investments.
In the US, the Securities and Exchange Commission and other federal financial regulators have reportedly been discussing the trading frenzy. Lawmakers from both parties have called for investigations into volatile trading. The SEC said last week that it was “closely monitoring and evaluating” the situation.
On TikTok, users were also posting about GameStop, AMC, and other Reddit-fueled stocks. The #investing hashtag on TikTok had about 1.6 billion views, and GameStop was searched about 600 million times in a single day on the app, according to MarketWatch.
Paxful, a cryptocurrency trading platform, studied how TikTok users gave investment advice, as BBC News first reported. About one in seven videos about financial investments posted on TikTok were misleading and asked users to make financial decisions without carrying disclaimers, according to Paxful.
“More than half (52%) of the influencer accounts that we analyzed had posted at least one misleading video,” Paxful said in a post, “Influencer Investors.”
One TikTok user with about 130,000 followers posted videos titled “This stock will make you rich” and “Only future millionaires can see this video!!” The videos singled out specific stocks. In the videos, the user quickly flashed the companies’ balance and earnings sheets, along with their most recent stock quotes.
“Consumers should be wary of adverts and advice online and on social media promising high-return investments, and should always do further research on the product they are considering,” an FCA spokeswoman told BBC News.
In December, Insider spoke with five TikTok creators focused on investing.