Global securities regulators are calling on social networks, search engines and app developers to join the fight against online investment fraud.
In a statement, the International Organization of Securities Commissions (IOSCO) said that tech companies should be stepping up their efforts to combat investor harm.
While tech-driven innovation has improved investors’ access to markets, increased competition and lowered costs, it has also “created new risks,” regulators said.
“Retail investors lose significant amounts of money to investment fraud orchestrated through online paid-for advertisements and user-generated content,” it said.
In this environment, IOSCO called on tech firms to enhance their efforts to reduce these threats to investors by taking action to “block, warn against or eliminate illegal investment offerings from their platforms.”
Specifically, it invited tech firms to connect to its global database of unregistered firms and those engaging in illegal financial activities — the IOSCO International Securities and Commodities Alerts Network (I-SCAN), which was launched in March — in an effort to disrupt suspected investment schemes.
Additionally, it called on firms to consider adopting measures that certain firms have deployed to disrupt online misconduct and prevent investor harm — such as conducting due diligence to ensure firms are legally authorized to operate in jurisdictions where they are seeking to advertise; developing internal policies and processes for detecting and swiftly removing investment scam content; and engaging directly with regulators and other authorities to share information.
“Working together, we can help retail investors, uphold market integrity and prevent financial harm globally, particularly given the cross-border nature of online harm,” it said.