FINRA recently announced M1 Finance LLC has been fined $850,000.00 for violations relating to social media posts made by influencers on the firm’s behalf.  Beginning January 2020 to April 2023, FINRA found M1 Finance compensated social media influencers for content promoting the firm. M1 Finance also requested the influencers include a hyperlink to the firm’s website, which potential new customers could open a brokerage account. Influencers were provided material, including graphics and a “Welcome Guide” so that their posts could highlight firm material in an effort to make the social media efforts more effective. The influencers were paid a flat fee for every new account that was opened using the unique hyperlink provided by the firm. Compensation was not limited.

Following its investigation, FINRA found the influencers posts contained “exaggerated, unwarranted, promissory or misleading claims,” which it deemed to be a violation of FINRA Rules 2210 and 2010. FINRA noted M1 Finance did not review or approve the influencers’ post content as required by FINRA Rules. FINRA also concluded the firm failed to have a reasonable supervision system to supervise the influencers’ posts made on its behalf.

M1 Finance ultimately reached a settlement with FINRA and consented to its findings. The fine against M1 Finance is the first formal FINRA enforcement disciplinary action involving a firm’s supervision of social media influencers.