Brooklyn Law Review


Mia Stefanou


Illustrated in part by the abnormal market volatility that resulted from the popularity of meme stocks in early 2021, a new era of securities trading is taking place. With increasing frequency, investors look to social media discourse for investment advice. The current regulatory regime in the United States fails to address the increasing prominence of a new type of market participant—the “finfluencer.” This new breed of advisor is the social media influencer who provides investment advice to other users online. This note discusses the global conversations surrounding the emergence of this group, examines the US governance framework, specifically the Investment Adviser’s Act of 1940, compares US oversight practices with those implemented in New Zealand, and proposes the adoption of more pointed regulation directed at online investment advice. More specifically, this note argues that by not properly responding to the needs of the modern trading markets, US regulators are leaving a growing amount of investment advice—primarily targeting unsophisticated retail investors— unregulated. This not only places individual investors at risk but also threatens the efficiency and integrity of the broader securities market.