Influencer Marketing Disclosures: Is #Ad Enough?

By Mark Leung and Jackie Zhao

In today’s digital world, influencer marketing is everywhere. But what are the rules behind it? Is it always clear when someone is being paid for their post? The short answer – not always, and that’s where the law comes in.

Canadian Law

In Canada, the Competition Act and the Canadian Code of Advertising Standards both require transparency when there is a relationship between an influencer and a brand (the “Rules”). This “material connection” can include anything from payment in cash, free products, or discounts to more subtle personal ties like family or employment relationships. The goal is simple: consumers should be able to tell whether an endorsement is genuine or influenced by hidden incentives or interests.

The Right Way to Disclose

According to the Rules, influencers and brands must disclose the “material connection” and these disclosures should be “clear and conspicuous”.

So what does that mean in practice?

• Be Upfront: Disclosures should be at the start of the content, whether it’s a YouTube video, an Instagram photo, or a “tweet”.

• Be Proximate: If the endorsement is contained in longer form content, then the disclosure should be placed close to when the endorsement begins.

• Use the Right Words: Hashtags like #ad, #sponsored, and #GiftedProduct are widely accepted. Something like #coolstylead or simply tagging the brand isn't enough.

• Don't Bury It: The disclosure should be easily seen or heard. Hiding it at the very bottom of a description box (where you have to click “See More”) is not acceptable.

For more guidance, check out Ad Standard's Influencer Marketing Disclosure Guidelines.

Large Fines in the US

Even with clear rules, enforcement issues persist. In 2020, the United States Federal Trade Commission pursued action against tea company Teami, which paid influencers – including celebrities like Cardi B – to promote health claims such as weight loss and cancer prevention. The issue was that the posts did not make it clear that they were paid advertisements.

Teami faced a $15.2 million fine (later reduced to $1 million due to inability to pay), and influencers received warning letters. The case underscored the risks for both brands and influencers when disclosures are not made properly.

The Rise of “Finfluencer” Marketing

With the growth of platforms such as Instagram and TikTok, a new category of influencers has emerged - “finfluencers”, namely, financial influencers who share money management advice, investing strategies, and financial tips. Their reach is enormous, and given the products and services they can endorse, their impact can be profound on consumers. As such, regulators in both Canada and the United States have warned that if these individuals are being paid for their endorsements, then they must disclose this fact, and such disclosure must be clear and transparent.

One of the most high-profile cases recently involved Kim Kardashian, who was fined $1.26 million by the U.S. Securities and Exchange Commission after promoting EthereumMax tokens on Instagram without clearly disclosing that she was paid $250,000 for the post. As part of the settlement, she also agreed not to promote cryptocurrencies for three years.

Alberta’s Recent “Finfluencer” Case

The Alberta Securities Commission (ASC) recently dealt with “finfluencer” marketing in its 2025 case involving finfluencer James Domenic Floreani who had been contracted by four Canadian public companies to promote their businesses and share valuations through his social media accounts on YouTube, X, and Patreon despite having no investing experience or formal finance education beyond some online courses and an introduction to finance course at a university. For this promotional work, Mr. Floreani received financial compensation, including shares in some of these companies.

In terms of disclosures, not only had Mr. Floreani failed to include disclosures in all of his content, but even the disclosures he did include did not seem to comply with the Rules (see above). For example, in one of his YouTube videos, he had posted the following statement at the bottom of the Description box (i.e., only visible after a user clicked “Show More”):

DISCLAIMER: Do your own research into the companies discussed on the channel – what I say is not to be taken as financial or investing advice. For entertainment purposes only.

SPONSORED INTERVIEW Jayconomics was compensated $750 CAD for conducting this interview by Peak Fintech. Jayconomics maintained all creative control and direction throughout the process.

Mr. Floreani had made no other disclosure in the video itself or in conjunction with it.

The key issue before the Commission was whether Mr. Floreani complied with Alberta’s “anti-touting rules” under s. 103.1(2) of Alberta’s Securities Act, which requires anyone engaged in “investor relations activities” to ensure that all statements or materials clearly and conspicuously disclose that they are issued on behalf of the issuer or a securityholder.

Referring to the 2023 BC Securities Commission (BCSC) decision of Re Stock Social Inc., ImagineAR Inc., and Johnston (Re), the ASC adopted the BCSC’s test on BC’s anti-touting rules under s. 52(2) of BC’s Securities Act (which the ASC found to be “nearly identical” to s. 103.1(2) of Alberta’s Securities Act). Under the BCSC’s test from Re Stock Social Inc., the following two elements must be present in order for “investor relations activities” to be compliant with the BC statute, namely, disclosures must: (a) clearly state that the content was issued on behalf of the issuer, and (b) be clear and conspicuous.

Applying this test to Mr. Floreani, the ASC found that the influencer’s posts failed to contain either element. Many posts contained no disclosure at all. But even for those that did, those notices appeared only at the very bottom of the page and were hidden unless viewers clicked the “Show More” button. Such placement, as noted by the ASC, did not satisfy the “clear and conspicuous” element of the Re Stock Social Inc. test. Thus, Mr. Floreani was in breach of Alberta’s anti-touting laws.

In terms of sanctions, the ASC recently ordered Mr. Floreani to pay an administrative penalty of $30,000 and over $10,000 in costs, as well as prohibiting him from conducting any “finfluencer” activities for a minimum period of two years. Interestingly, the ASC declined to require Mr. Floreani to disgorge himself of the profits earned from his promotional work (which equated to over $110,000 in cash and shares, plus more than $217,000 from Patreon), finding that such a remedy was not in the public interest in the circumstances.

Without a disgorgement order, however, some commentators have warned that the Re Floreani decision may not serve as the general deterrent that the ASC intends it to be. With Mr. Floreani retaining over $260,000 in net proceeds after all is said and done, it remains to be seen whether the ASC decision will serve as a sufficient “warning shot” for finfluencers in the emerging market space.

Key takeaway – #Ad is Not Always Enough

When it comes to finfluencer marketing, the guidance from the BC and Alberta Securities Commissions is clear – at a minimum, disclosures should:

1. explicitly state something analogous to: “Paid advertisement on behalf of [Issuer name]”, and

   
   

2. appear at or near the beginning of the post or video - not hidden in links or expandable sections.

For more information, take a look at the BC Securities Commission's guidance on promotional communications about companies.

Why Disclosure Matters

Staying on the right side of these rules is crucial for both brands and influencers. In the world of social media, being transparent is not just a good idea - it is the best way to avoid financial penalties and costly investigations.

For businesses, this means creating clear contracts and providing effective guidance to influencers. For influencers, it means providing the necessary disclosures to your audience.

By following these rules, you not only protect your business but also, most importantly, maintain the consumer’s trust in your brand.

Have more questions about these influencer marketing rules? Feel free to reach out to us at hello@gointerhouse.com.