visimoney
TLDR:
- FINRA fined M1 Finance $850,000 for misleading social media influencer posts promoting their services
- 1,700 social media influencers were involved in the campaign
The Financial Industry Regulatory Authority (FINRA) has imposed an $850,000 fine on M1 Finance for inadequate supervision of social media influencers promoting the firm’s services. Between January 2020 and April 2023, M1 Finance engaged 1,700 influencers in a marketing campaign to attract potential customers to their brokerage accounts.
Investigations by FINRA revealed that the social media posts made by these influencers did not adhere to regulatory standards, failing to provide accurate information about the firm’s margin lending program. The firm also did not review or approve the influencer-generated content, violating regulatory requirements.
Bill St. Louis, the Executive Vice President and Head of Enforcement at FINRA emphasized the importance of maintaining supervisory systems to address risks related to social media influencer programs, especially as investors rely on social media for financial information.
As a consequence of these violations, M1 Finance has committed to rectifying the deficiencies identified by FINRA and ensuring compliance with regulatory standards in the future.
