According to FINRA, Moomoo Financial Inc. was censured, fined $750,000, and required to remediate its influencer marketing practices after communications by paid influencers were found to be misleading and not properly disclosed as advertisements.

The firm paid influencers to promote it on social media, compensating them for each new account opened through unique referral links or per promotional post. Customers opened and funded more than 29,000 new accounts through these influencer referral links.

The influencer communications contained multiple violations. They claimed the firm charged zero commissions without disclosing that other fees may apply or linking to the fee schedule. They made false and misleading claims suggesting that the firm's FINRA membership meant customers' investments were safe. They also failed to clearly identify posts as paid advertisements.

The firm failed to review and approve all influencer posts before publication and failed to preserve records of these communications, including dates of use and approvals. Even when the firm did review communications, it did not maintain records of who approved them or when.

Additionally, the firm failed to provide initial and annual privacy notices to customers as required by SEC Regulation S-P.

This case highlights the regulatory challenges of social media marketing. Broker-dealers are responsible for the content their paid promoters publish. Investors should be skeptical of social media financial promotions and independently verify claims about fees and protections. FINRA membership does not guarantee investment safety.