TikTok users were warned against taking stock tips from influencers by regulators.
Many young people have discovered that TikTok is a great source of investing advice.
The Financial Conduct Authority (FCA) has issued a warning to TikTok users about taking stock tips from the app.
According to BBC News, the FCA issued a warning about “promising high-return investments.”
There was one user who posted videos with titles like: “Only future millionaires would want to see this video!!”
“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 a BBC tech reporter.
In the last few weeks, social media has been flooded with investment advice, as the Wall Street Bets subreddit of Reddit has banded together and fueled sky-high returns on GameStop, AMC, and other investments.
In the US, the SEC and other federal financial regulators have reportedly been discussing the trading frenzy. Lawmakers have called for investigations into volatile trading. According to the SEC, it has been “closely monitoring and evaluating” the situation since last week.
On TikTok, users post about GameStop, AMC, and other Reddit-fueled stocks. According to MarketWatch, TikTok’s #investing hashtag had 1.6 billion views of TikTok videos, and GameStop’s online presence was searched over 600 million times in a single day on the app.
One TikTok user had about 130,000 followers who posted videos titled “This stock will make you rich”. In the videos, the user quickly flashed the companies’ balance and earnings sheets, along with their most recent stock quotes.