Firm Fined for Violations Regarding Use of Social Media Influencer Program

The Case

FINRA announced that it fined a firm $850,000 for social media posts made by influencers on the firm’s behalf that were not fair or balanced or contained exaggerated, unwarranted, promissory, or misleading claims. 

The censure also highlighted that the firm failed to have a reasonable system, including written procedures, for supervising the communications that the firm’s influencers made on its behalf, in violating both FINRA and SEC rules. 

Why Does This Matter?

This case arises from FINRA’s examination of firm practices regarding customer acquisition via social media channels. It represents the first formal FINRA disciplinary action involving a firm’s supervision of social media influencers.

InnReg's Experience

InnReg has over a decade of experience developing effective supervisory frameworks for fintechs based on a systematic approach to identifying risks, implementing effective controls, and enhancing internal documentation to reduce regulatory burdens. InnReg’s compliance consulting services empower fintechs to enhance policies, processes, and technologies for e-communications compliance. 

Learn More About This Topic

For additional details, read InnReg’s leading-edge perspective on financial advertising compliance, which provides financial innovators with a summary of the latest FTC and SEC regulations, as well as key insights on the impact of compliance programs on digital marketing.