Moomoo Financial has been fined $750,000 by the Financial Industry Regulatory Authority (FINRA) for multiple breaches of industry rules, it was revealed Wednesday.
Moomoo Financial Hit With $750,000 Fine by FINRA
The violations, which spanned several years, are said to have highlighted lapses in advertising practices, supervision, and privacy compliance.
According to FINRA’s findings, retail trading platform Moomoo Financial paid social media influencers to promote its services but failed to ensure these promotions were “fair and balanced.”
FINRA said some influencer posts made misleading claims about the potential profits from trading, downplayed risks, and falsely suggested that customer investments were guaranteed due to the firm’s regulatory memberships.
Between 2020 and 2022, Moomoo also neglected to have registered principals review these promotional materials, a breach of FINRA’s supervisory standards.
Furthermore, the firm is said to have failed to maintain proper records of these communications and neglected mandatory filings related to options trading promotions.
Privacy violations were another point of contention. FINRA revealed that from 2018 to 2021, Moomoo failed to provide initial or annual privacy notices to over 450,000 customers, a requirement under federal Regulation S-P.
As part of the settlement, Moomoo neither admitted nor denied the allegations but consented to the fine and a censure. The firm is also required to implement corrective measures and certify compliance within 180 days.
