<div>
  <p>
  </p>
  <ul>
    <li>
      <p>
        M1 Finance, an automated investment platform, is fined USD 850,000 by FINRA for social media posts made by influencers on the firm's behalf that were not fair or balanced and contained misleading claims violating FINRA Rules 2210 (Communications with the Public) and 2010 (Standards of Commercial Honor and Principles of Trade).
      </p>
    </li>
    <li>
      <p>
        Between January 2020 and April 2023, M1 Finance paid nearly 1,700 influencers to promote the firm, opening over 39,400 new accounts. The firm failed to review or approve the content and had no reasonable supervisory system. M1 Finance consented to the entry of FINRA's findings without admitting or denying the charges and agreed to remediate the issues identified.
      </p>
    </li>
    <li>
      <p>
        It represents the first formal FINRA-enforced disciplinary action against a firm that supervises social media influencers. The case results from FINRA&rsquo;s targeted examination of firms' use of social media for customer acquisition.
      </p>
    </li>
    <li>
      <p>
        <b>Analyst QuickTake: </b>
        Other regulatory actions taken against retail trading companies in the recent past include 1) Titan 
        <a href="https://sp-edge.com/updates/21474">
          facing SEC charges
        </a>
         for violating marketing rules, resulting in a cease-and-desist order, censure, and USD 192,454 in disgorgement, plus a USD 850,000 penalty for misrepresenting investment performance and other compliance breaches and 2) Goldman Sachs being fined 
        <a href="https://sp-edge.com/updates/22257">
          USD 6 million
        </a>
         by the SEC for failing to provide accurate securities trading information.
      </p>
    </li>
  </ul>
  <p>
  </p>
</div>


<div>
  <p>
    <a href="https://www.finra.org/media-center/newsreleases/2024/finra-fines-m1-finance-850000-violations-regarding-use-social-media">
      Press release
    </a>
  </p>
</div>


Retail Trading Infrastructure

ANALYST_QUICK_TAKE

<div>
 
 <p>M1 Finance, a digital investing platform, has been hit with a USD 850,000 fine by the Financial Industry Regulatory Authority (FINRA). The fine is due to M1 Finance's use of social media influencers to advertise their platform, with content that was deemed unbalanced and made misleading claims. This contravenes FINRA rules regarding Communications with the Public and Standards of Commercial Honor and Principles of Trade.</p>
 <p>The promotion occurred from January 2020 up until April 2023, with about 1,700 influencers paid to advertise M1 Finance's services. These campaigns resulted in the opening of over 39,400 new accounts. However, M1 Finance did not review or approve the promotional content and did not implement a satisfactory supervisory system. Despite not admitting or denying the charges, the firm agreed to address the issues identified in FINRA's findings.</p>
 <p>This case is particularly significant because it is the first time FINRA has carried out disciplinary action towards a company supervising social media influencers. The action stems from FINRA's close examination of businesses' use of social media platforms as a tool for attracting customers.</p>
 
</div> <p><b>Analyst QuickTake:<br>
 </b> Other regulatory actions taken against retail trading companies in the recent past include 1) Titan <a href="https:<br>
//sp-edge.com/updates/21474"> facing SEC charges </a> for violating marketing rules, resulting in a cease-and-desist order, censure, and USD 192,454 in disgorgement, plus a USD 850,000 penalty for misrepresenting investment performance and other compliance breaches and 2) Goldman Sachs being fined <a href="https:<br>
//sp-edge.com/updates/22257"> USD 6 million </a> by the SEC for failing to provide accurate securities trading information.</p>

All Updates

M1 Finance fined by FINRA for USD 850,000 over violations regarding social media influencer program

M1 Finance expands product offering with crypto trading

M1 Finance raises USD 150 million in Series E funding and achieves unicorn status