According to FINRA, Open to the Public Investing, Inc. was censured and fined $350,000 for paying social media influencers to promote the firm through communications that were not fair and balanced or that made misleading claims.

The New York firm paid influencers either a fee per post or a fee for every new account opened using a unique referral link. The firm did not limit how much compensation influencers could earn. The influencer posts were widely distributed, resulting in more than 23,000 new accounts being opened and funded using the referral links.

Influencers claimed the firm offered "commission free trades" without disclosing that other fees may apply or providing a link to the firm's fee schedule. Some promoted fractional share investing without disclosing limitations such as the inability to transfer fractional shares to another broker-dealer.

Several posts failed to clearly identify themselves as paid advertisements, which is required for sponsored content promoting financial services.

The firm did not have a registered principal review and approve all influencer posts before publication. It also failed to maintain copies of all posts or records of which principal approved which communication.

The firm's supervisory system was not reasonably designed to oversee influencer communications. As a result, the firm could not review and approve content before distribution or maintain required records.

The firm has since revised its procedures to enhance supervision of influencer communications.

For investors, this case is a reminder that social media content promoting investment platforms may be paid advertising. "Commission free" claims may not tell the whole story about costs. Always review a firm's fee schedule before opening an account, and understand limitations on products like fractional shares.