Legal Help Hub
What Could I Be Liable for if an Investment Service I Promoted on Instagram Collapses?
Introduction
You could face criminal, regulatory or civil action if you promoted a trading service that later collapsed. However, followers losing money does not automatically make you guilty of fraud or personally responsible for their losses.
In England and Wales, your liability depends on what you promoted, whether the financial promotion was lawful, what you knew about the service and the claims you made to followers.
The police may investigate suspected fraud, while the Financial Conduct Authority (FCA) may examine whether you breached financial promotion rules. Followers may also consider civil claims.
Obtain specialist legal advice before responding to investigators or making further public statements.
Is Promoting Investments Without FCA Authorisation a Criminal Offence?
Yes, it can be. Under the Financial Services and Markets Act 2000, communicating an invitation or encouragement to invest in the course of business is generally prohibited unless the promotion is properly authorised, approved or exempt.
You do not necessarily need personal FCA authorisation to promote an investment. However, the promotion must meet the relevant legal requirements.
Since 7 February 2024, authorised firms generally need specific FCA permission to approve financial promotions for unauthorised people, unless an exemption applies.
If the trading service supplied you with an approved script, your solicitor can check whether the approval was valid and whether your Instagram content matched what was approved.
The phrase “in the course of business” does not necessarily require payment for a particular post. Promoting investments as part of building or monetising an audience may be sufficient.
Breaching the financial promotion restriction can carry up to two years’ imprisonment, an unlimited fine or both. In February 2026, seven social media influencers were sentenced at Southwark Crown Court after admitting offences involving unauthorised promotions for a foreign exchange trading scheme.
Their cases show that influencers can face prosecution even where they are not operating the investment service themselves.
Can an Influencer Face Fraud Charges for a Promotion They Believed In?
Yes, but genuinely believing the trading service was legitimate may be important to your defence.
Fraud by false representation requires proof that you dishonestly made a false or misleading statement, knowing it was or might be untrue, with the intention of making a gain or causing a loss or risk of loss. The prosecution must establish those elements. The service collapsing does not, by itself, prove fraud.
Courts consider what you genuinely knew or believed at the time and whether your conduct would be regarded as dishonest by ordinary, reasonable people.
Investigators may examine whether you received warnings about the service, ignored complaints or continued promoting it after becoming aware of concerns.
For example, if you genuinely believed the provider’s claims and had no reason to suspect they were misleading, that may support your explanation.
However, relying on promotional scripts without checking their accuracy does not automatically remove liability. Investigators will examine what you knew, whether you recognised any warning signs and whether the prosecution can establish dishonesty.
Your solicitor can review the communications and evidence available when you made the posts.
What Do Claims of Guaranteed Returns Mean for My Position?
Claims such as “guaranteed returns”, “protected” or “secure” in a financial promotion significantly worsen both the regulatory and criminal position.
The FCA’s Conduct of Business Sourcebook (COBS) requires that financial promotions are fair, clear and not misleading. That standard applies to every element of a promotion, including the words used to describe what a follower might expect to receive.
FCA guidance makes clear that terms such as “guaranteed”, “protected” and “secure” should only appear in a financial promotion where the word is capable of being a fair, clear and not misleading description, and the promotion provides everything a reader needs to understand why that description is accurate.
Using such terms without a proper factual and evidential basis is both a regulatory breach and direct evidence that the content of the promotion was misleading.
Whether the wording came from a script supplied by the provider does not remove the risk. The question remains whether you had reason to query the language before using it. Promoting guaranteed returns to a large audience without checking whether the claim had any proper basis is a factor a court or regulator will examine.
Does Receiving Commission Affect My Potential Liability?
Receiving commission does not automatically make you guilty of fraud, but it may be relevant to the investigation.
Payment for promoting the service may support the conclusion that your posts were made in the course of business and therefore subject to financial promotion restrictions. Commission may also be examined when investigators consider your financial interest in attracting followers to the service.
However, the prosecution must still prove the legal requirements of any alleged fraud offence.
Disclosing that you were paid is relevant to advertising transparency, but it does not automatically make misleading investment claims lawful. A contract with the trading service may also contain an indemnity covering certain costs or losses. Such an agreement does not protect you from criminal prosecution or regulatory action.
Investigators may examine the checks you carried out before accepting the arrangement, including whether you reviewed the service’s regulatory status or questioned its claims.
Your solicitor can assess the contract, payments and correspondence to establish what you were told and what you understood.
What Should I Do About Old Posts, Captions and Messages?
Preserve all relevant Instagram content. Do not delete or alter material to conceal it from investigators. Do not delete, edit or archive any content to conceal it.
Destroying or concealing evidence while under investigation can constitute a separate criminal offence, and investigators and courts can obtain content from platforms through formal legal processes even after you have deleted it yourself.
You should preserve everything that may be relevant. That includes Instagram posts, Stories, Reels, captions, direct messages and comments; contracts and briefing documents from the trading service; payment records and commission statements; any scripts, content briefs or approval documents supplied by the provider; and private communications with anyone connected to the financial promotion.
Take screenshots and store copies securely. Platforms can independently modify or remove content, so maintaining your own record provides an additional layer of protection. Store copies in more than one location and do not share them with anyone other than your solicitor at this stage.
Any financial promotions that remain live should be reviewed with a solicitor before any decision is made about whether to leave them up or take them down. That decision has both legal and regulatory dimensions and should not be made without advice.
Avoid making further statements about the service or investigation before obtaining advice.
Facing Legal Issue?
Speak to one of our Fraud and Financial Crime Defence Specialists for confidential advice on your position and next steps.
Strictly Confidential and No Obligation
How Should I Respond to Police or FCA Contact?
Get legal advice before responding to any contact from the police or the FCA. Do not make voluntary statements to either body without a solicitor present.
If police contact you, whether you are arrested or invited to attend a voluntary interview under caution, you will be given a formal caution. A complete “no comment” interview is not always the right approach and should only be chosen after taking advice from a solicitor who has reviewed the circumstances.
The FCA has its own statutory powers to require information and documents under the Financial Services and Markets Act 2000. An FCA information requirement or compelled interview operates differently from a police interview.
Do not contact followers, co-promoters or the trading service provider without legal advice. Doing so risks allegations of witness interference or further regulatory breach. Do not post about the investigation on social media under any circumstances.
How a Solicitor Can Help With Criminal and Regulatory Exposure
A solicitor experienced in fraud and financial crime can assess your potential liability under financial promotion rules, fraud legislation and any civil claims arising from the trading service’s collapse.
They can review your Instagram posts, contracts, commission records and communications with the provider to establish what you promoted and what you knew.
For example, the evidence may show that you relied on approved marketing material, received assurances about the service or raised concerns before continuing the promotion.
At the police interview stage, a solicitor can advise on how to respond to questions about the promotional claims, payments and your relationship with the provider.
They can also advise on FCA information requests, regulatory proceedings and any claims brought by followers seeking to recover their losses.
Civil claims may raise separate questions about what representations you made, whether followers relied on them and whether you are legally responsible for any loss. An investigation does not mean you will be charged or held liable for every loss suffered by followers.
However, criminal, regulatory and civil proceedings can overlap, making it important to consider each process together.
Speak to a Fraud Defence Solicitor
If a trading service you promoted on Instagram has collapsed and followers have lost money, obtaining legal advice can help you understand whether your conduct may amount to an unlawful financial promotion or fraud.
Ashmans Solicitors can review the evidence, advise on police and FCA enquiries and explain how potential civil claims may affect your position. Our Fraud and Financial Crime solicitors can also advise on preserving promotional records and responding to investigators.
5 Key Takeaways
- Promoting an investment without meeting financial promotion requirements can be a criminal offence, even if you believed the service was legitimate.
- Fraud requires proof of dishonesty and the relevant intention. Followers losing money does not automatically establish fraud.
- Claims of guaranteed returns can create legal risks where they are inaccurate or unsupported by evidence.
- Receiving commission does not automatically make you liable, and disclosing payment does not make an unlawful promotion acceptable.
- Preserve your posts, messages, contracts and payment records, and obtain legal advice before responding to police or FCA enquiries.
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