Discord users beware: notorious finfluencer found guilty of giving finance advice without a licence

The Australian Securities And Investments Commission’s (ASIC) case against “finfluencer” Tyson Scholz has secured a guilty verdict in the Brisbane Federal Court on Tuesday.

Scholz dubbed himself the “ASX Wolf” online, in a reference to the film Wolf of Wall Street, which follows the exploits of disgraced Wall Street broker Jordan Belfort.  

All in all, Scholz has been found guilty of providing financial advice without a licence, breaching a number of laws. 

The successful outcome of the case (for ASIC) ends its first ever case against a “finfluencer”. That is, somebody who uses social media to disseminate financial advice materials, often under the belief they are operating in a grey area of the law. 

That, clearly, is no longer the case, and today’s finding is likely to become a heavily earmarked precedent in the years ahead. 

Discord and Instagram used as evidence 

Worth noting is that the contents of chat room discussions on the product ‘Discord’ formed part of the evidence in the case, as well as Instagram posts, highlighting that the reach of the court extends to areas online often thought as “safe” by certain operators.  

Pictures of Scholz with luxury cars and expensive wines were often intermingled with recommendations to buy microcap stocks, the share prices of which are more susceptible to wild fluctuation than large companies. 

“Seminars” the smoking gun 

Scholz’s largest mistake was charging $500 to patrons attending his self-styled ‘seminars,’ which were basically online training sessions intended to teach people how to trade in a way benefiting himself. 

He also charged $1000 entry to his online chatroom. 

Intent, intent, intent 

Downes noted Scholz was aware the likely consequence of his actions was that his own stock portfolio would benefit.

In short: Scholz knew what he was doing, and intended to do what he was doing. 

Instagram posts were found to satisfy the definition of “recommendations” of stocks, thereby providing the means for the judge to charge Scholz with illegally conducting financial advice without a licence. 

Costs payable by Scholz will be determined at a hearing in January.