Moomoo Financial Settlement with FINRA, Agrees to $750K Fine

Moomoo Financial Settlement with FINRA, Agrees to $750K Fine

Moomoo Financial has reached a settlement with the Financial Industry Regulatory Authority (FINRA), agreeing to pay a $750,000 fine for violations related to its use of social media influencers to promote the firm. The settlement addresses several breaches of FINRA rules and regulations that occurred between January 2020 and the present.

According to FINRA, Moomoo Financial paid social media influencers to post promotional content on platforms such as Instagram, Twitter, and YouTube. However, the firm failed to ensure that these posts were fair, balanced, or free of misleading claims. These actions violated multiple FINRA rules, including Rules 2210(d)(1), 2210(e), and 2220(d)(2)(A), as well as the firm’s obligation under Rule 2010 to maintain ethical standards.

Moomoo Financial Settlement with FINRA, Agrees to $750K Fine

From January 2020 to September 2022, Moomoo Financial also neglected to have a registered principal review and approve content created by influencers before it was posted. The firm failed to oversee influencer interactions in online forums and did not maintain proper records of influencer communications or approvals, violating regulations under the Securities Exchange Act of 1934 and FINRA Rules 2210(b) and 2220(b). Additionally, it neglected to file options communications with FINRA’s Advertising Regulation Department, as required.

Furthermore, Moomoo Financial violated privacy regulations by failing to provide its privacy policy to about 450,000 customers when they opened brokerage accounts between January 2018 and December 2021. The firm also did not send the required annual privacy notices to these customers, which breached Regulation S-P.

As part of the settlement, Moomoo Financial has agreed to a censure and has to certify that it has implemented a compliant supervisory system, including written supervisory procedures, to ensure future adherence to FINRA rules.

With the imposed fine and corrective measures, Moomoo Financial has to implement stronger oversight to prevent similar violations in the future, ensuring better compliance with industry standards and regulations.

Also, stay updated with the Latest Broker News.

Leave a comment