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July 23, 2025

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FINRA Fines Public Investing $350K Over Misleading Influencer Promotions

By: Sean Teehan, May 29, 2025

Celebrity-backed brokerage firm faces regulatory scrutiny for unsupervised social media campaigns.

Public Investing Penalized for Lack of Oversight

Public Investing, a social-first online brokerage supported by celebrities like Tony Hawk and Zoe Saldana, has agreed to pay a $350,000 fine to the Financial Industry Regulatory Authority (FINRA). The regulator found that the firm failed to supervise its paid influencer marketing between 2020 and 2023, violating key communication and supervision requirements under FINRA rules.

According to a May 27, 2025, settlement, Public paid approximately 110 influencers—ranging from micro-creators to household names—to promote its platform on social media. Despite providing influencers with a “content creator kit” and key marketing messages, the firm did not review or retain their posts, nor did it implement a system to monitor whether the content met regulatory standards.

Misleading Claims and Missing Disclosures

FINRA’s investigation found that some influencer content included statements that were unbalanced, misleading, or failed to disclose necessary information. Common infractions included claims about “commission-free trading” without clarifying that other fees could apply, as well as promotions for fractional share purchases that did not disclose associated limitations.

Under FINRA Rule 2210, any communication made by or on behalf of a member firm must be fair, balanced, and based on principles of good faith. Public’s failure to preserve influencer posts or pre-approve them violated these standards.

A Pattern of Enforcement Is Emerging

This action is the latest in a string of influencer-related enforcement efforts by FINRA. Just weeks earlier, online broker Webull was fined $1.6 million for similar violations. In March 2024, M1 Finance was penalized $850,000 after its influencers posted exaggerated and promissory claims about investment outcomes.

Legal and compliance professionals say these cases signal a broader regulatory push. “This should be high on the radar for any firm working with third-party influencers,” said Francois Cooke, managing director of ACA Compliance’s broker-dealer services group.

Regulatory History and Industry Guidance

FINRA has long held that firms are responsible for communications made by compensated third parties. In 2021, the agency launched a targeted sweep of social media practices among broker-dealers, specifically looking into how they deploy influencers.

In the wake of that review, FINRA issued guidance urging firms to:

• Vet influencer backgrounds

• Provide training on what influencers can and cannot say

• Monitor and retain all influencer-generated content

Although Public updated its supervisory procedures in March 2023, the enforcement action reflects activities that took place before the changes were implemented.

Legal Risk Extends Beyond FINRA

Failure to supervise third-party communications doesn’t just violate FINRA rules—it can also trigger investigations by the U.S. Securities and Exchange Commission (SEC). “Misleading influencer statements may cross into SEC anti-fraud territory,” said Alejandro Soto, partner at Fridman Fels & Soto PLLC. “And if intentional deception is involved, criminal charges [by the Department of Justice] are not off the table.”

FINRA’s settlement with Public explicitly noted that some of the influencer content could potentially run afoul of federal securities laws, particularly anti-fraud provisions.

Fridman Fels & Soto: Counsel for Today’s SEC Challenges

As regulators increase scrutiny of influencer marketing in the financial industry, firms need experienced legal partners to navigate evolving compliance risks. Fridman Fels & Soto PLLC offers trusted guidance in all matters involving SEC and FINRA Enforcement Defense.

Need legal support to protect your business?

Contact Fridman Fels & Soto PLLC today for a confidential consultation regarding inquiries or subpoenas by the SEC or 8210 Request by FINRA.

Source:
Sean Teehan, Financial Planning. “Finra Fines Celebrity-Backed B-D over Finfluencer Statements.” May 29, 2025.
https://www.financial-planning.com/news/finra-fines-public-investing-over-finfluencer-statements