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Finfluencer Banned Over Illegal Financial Tips Claims he is Miserable, While Holidaying in Europe

The "ASX Wolf" has put his $4.6 million waterfront mansion up for sale just weeks after being hit with bankruptcy orders.
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Image Source:

Social media influencers are no longer just people who give fashion and beauty tips, but now advice on healthcare, personal finance, and stock trading is also available online. Although these financial influencers or finfluencers may seem to be sharing their market insights, the truth is such information coming from someone who isn't qualified, could do more harm than good for investors. Tyson Scholz also known as "ASX Wolf," listed his $4.6 million waterfront estate in Sanctuary Cove for sale. Just ten months ago, he paid $300,000 less than what he is now demanding. He did all this thanks to his popularity among thousands on Instagram who follow his trading tips and the same has landed Scholz in a legal muddle. In December 2022, the Brisbane Federal Court made a ruling declaring that he was providing financial advice without the required license. The court said his advice was a big part of his business and his Instagram posts helped build his image as a successful trader.

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It was revealed in December 2022 during his legal case that Scholz's company charged $500 to $1500 in membership fees to users. The court further alleged that he provided Stage 1 and Stage 3 packages, which are distinct levels of share trading instruction. These were billed as either basic or advanced lectures, and for an additional charge, he offered one-on-one share trading advice or ideas. Additionally, there was an alleged Stage 2 package that included one year's access to a private chat site called Black Wolf Pit, which used Discord.

Legal analysis and investor protection

According to Justice Kylie Downes, one of Mr. Scholz's most important contributions to his company was his financial guidance. She emphasized that his advice wasn't just a one-time occurrence but was part of his ongoing and systematic business operations from which he made a profit. Justice Downes further pointed out that Mr. Scholz had established a reputation as a skilled share trader with the ability to spot good investment possibilities on Instagram, thanks to his lifestyle and life story posts. She pointed out that even while his posts did not specifically advise purchasing shares, it was still enough to positively mention a business or its shares to change people's opinions. Sarah Court, the deputy chair of ASIC, cautioned that influencers discussing financial products on social media without the proper license could face legal action. She advised investors to take steps to safeguard themselves.

Pexels | Markus Winkler
Pexels | Markus Winkler

Regulatory changes and investor behavior

"Financial services laws are in place to safeguard investors in case anything goes wrong," Downes said. "Those who paid Mr. Scholz for his advice attended his seminars or joined his private online forums as well as those who bought shares based on his recommendations or opinions, didn't benefit from these protections," she added. Unlicensed "influencers" are no longer allowed to talk about stocks, investment funds, or other financial items according to new rules. Violation of these regulations may result in fines exceeding $1 million or imprisonment for up to five years. ASIC found that almost 41% of investors looked for information on social media and networking sites such as Facebook, YouTube, podcasts, and from fin-influencers.

Image Source: tysonscholz_infinitytrading | Instagram
Image Source: tysonscholz_infinitytrading | Instagram

Proposal controversy

About a year ago, there was a photo of Scholz with a private jet, hinting that he might have proposed to his wife, Sophie Lee Anderson during a flight over the Queensland-NSW border and back to the Gold Coast in December 2021. The Queensland Police looked into the post because crossing the border might have broken Covid restrictions at the time. However, the police found out that the footage of the jet in the posts was old, and Scholz didn't leave the state when people thought he did. Nevertheless, the proposal did happen, but instead of a jet, it involved a helicopter tour of the Gold Coast.

Following the crackdown by authorities that demanded court-mandated costs related to his illegal social media operation back in 2020 and 2021, the once thriving finfluencer has been declared bankrupt. Amidst these drastic changes, Scholz claims to be miserable while working on sealing mining deals in Cape Town and standing outside a Prada store in Geneva, just because he can no longer afford the brand. His Instagram also shows him holidaying in Paris and Switzerland, but Scholz claims that he was miserable all along.

Although he may seem to be having a great time, Scholz has told authorities that he hasn't been employed for 18 months, which is why he can only offer payment in three monthly installments of $25,000. He claims that his mental health has been deteriorating, and the seemingly luxurious lifestyle is just a way to stay positive.