The CNMV fines Twitter €5 million for advertising 'financial scams' without verifying their legality

The National Securities Market Commission (CNMV) has decided to fine Twitter (now called 'X') €5 million for a continuous and very serious infringement, due to failing to comply with its collaboration duties concerning advertisements of 'financial scams', as reported this Thursday in the Official State Gazette (BOE).

According to the supervisory body, the company failed to meet its collaboration duties by not properly responding to a request related to advertisements about the company Quantum AI.

The sanctioning file details that Twitter did not verify whether Quantum AI had CNMV authorization to offer financial services or if it was listed among entities warned for operating without a license.

This lack of verification occurred despite a formal request sent by the supervisor on November 8, 2023, as part of its actions to protect investors against potential frauds or financial scams spread on digital platforms.

Specifically, the body chaired by Carlos San Basilio has decided to sanction the new 'X' for failing to assist the CNMV, which includes verifying whether Quantum AI was authorized to provide investment services and ensuring it was not listed among entities warned by the CNMV or other foreign supervisory bodies, concerning the advertisements included in the request sent by the CNMV on November 8, 2023.

Following the interested party's waiver to file administrative appeals, the mentioned sanctioning resolution has become final in this way, without prejudice to its possible challenge before the Contentious-Administrative Chamber of the National Court.

This is the seventh highest sanction imposed by the CNMV since public records of its sanctioning resolutions exist.

OPENING OF THE SANCTIONING FILE

The CNMV agreed at the end of 2024 to open a sanctioning file against the platform Twitter (now called 'X') for the possible breach of its duties regarding advertisements published by 'financial scams' like Quantum AI on its network.

The stock market supervisor detailed in a statement that the executive committee made this decision on December 13 due to the possible commission of a very serious continuous infringement -- according to articles 290.1 and 290.2 of the Securities Market and Investment Services Law -- for failing to verify whether Quantum AI was authorized to provide investment services and if it was included in the list of warned entities.

All this, in relation to Quantum AI's paid advertisements published on the mentioned social network in December 2023.

In this regard, the CNMV emphasized that, in a context of "growing impact" of financial fraud, the media relevance that - coinciding with the publication of Quantum AI's advertisements on the X platform subject to the file - has been significant in public opinion regarding the existence of an alleged scam by unauthorized entities warned by the national supervisor.

In this alleged scam, these 'financial scams' took advantage of the image of Spanish public figures to post tweets on the 'X' platform simulating news in which one of these famous figures claimed to have obtained high returns using an application created by one of these entities.

Thus, regarding the chronological order of events so far, it should be noted that the CNMV warned at the end of November 2023 about several websites of the 'scam' Quantum AI that used the image of Antonio Resines and 'El País'.

That month, the then-president of the CNMV, Rodrigo Buenaventura, warned that the supervisor was investigating the social network 'X' for allowing advertising of this type of companies (specifically Quantum AI, but also other unauthorized companies).

Subsequently, the CNMV issued a statement in mid-December 2023 indicating that it would exercise "all the supervisory and sanctioning possibilities granted by current legislation, including the responsibility of websites, media, and social networks that disseminate such advertising without verifying that the advertiser is licensed to offer investment services and is not warned as a financial scam or pirate entity."

In that document, Quantum AI was expressly mentioned among the companies committing this alleged fraud and that had already been subject to specific warnings by the CNMV.

The CNMV's warnings about 'financial scams' can be consulted on its website, and investors can direct their inquiries to the investor service number 900 535 015, as well as through the inquiry form.

Additionally, the CNMV website offers a search engine for warned entities and a decalogue of advice for investors to avoid 'financial scams'.