A Queensland influencer has breached Australian financial law by charging followers for his financial advice.
Tyson Scholz, known as ‘ASX Wolf’ on Twitter and Instagram, built a following by flaunting a luxurious lifestyle through supposed success on the stock market.
The Federal Court found this week he was unlawfully conducting a financial advice business without the proper licence.
Background
From March 2020 to November 2021, Scholz used his social media channels to share financial advice about trading on the Australian Securities Exchange (ASX).
Scholz developed a paid membership and tip program. There were different tiers in the program, which included training courses, investment seminars, and access to a private chat site.
Fees of up to $1,500 were billed to some members. Court documents showed Scholz received over $1.1 million in a 10-month period.
Court proceedings
In December 2021, the Australian Securities and Investments Commission (ASIC), the national financial services regulator, began Federal Court proceedings against Scholz.
They sought for Scholz’s business to be permanently stopped, as they believed he didn’t have the proper licence to provide financial advice.
The Federal Court temporarily blocked Scholz from continuing business later that month, ahead of hearings for the case. That happened this year, with the Court delivering a verdict yesterday.
The verdict
It was ruled that Scholz’s activity constituted a business and that his advice was part of “continuous and systemic business operations” that he unlawfully profited from.
Instagram photos depicting Scholz’s “lavish lifestyle” derived from his success on the share market were also found to have encouraged followers to trust his financial advice.
What’s next?
Scholz will face another hearing next month, where other issues, such as costs and punishments, will be finalised.
ASIC is asking the Court to ban Scholz from involvement in any Australian financial service business, and in transactions from customers receiving stock market advice.
