TradeZero America, Inc., a trading platform for retail investors, has been fined $250,000 by the Financial Industry Regulatory Authority ( FINRA ).
TradeZero America, Inc., a trading platform for retail investors, has been fined $250,000 by the Financial Industry Regulatory Authority (FINRA). The Brooklyn-based firm, a FINRA member since 2016, faced allegations of multiple regulatory violations between July 2020 and October 2022. The settlement addresses the firm's use of social media influencers and inaccurate privacy notices provided to customers. TradeZero America Fined $250,000 by FINRA for Alleged Social Media Violations FINRA's investigation revealed that TradeZero America paid social media influencers to promote its services without ensuring the communications were fair, balanced, and compliant with regulatory standards. Influencer posts often contained exaggerated and promissory statements, violating FINRA rules. Moreover, the firm failed to review and retain records of publishe videos and posts. "TradeZero America did not review its influencers' videos prior to their posting on social media platforms, nor did the firm retain those videos. The firm also did not review or retain influencers' posts made in online interactive electronic forums," FINRA commented. In addition, between January 2020 and January 2022, TradeZero America provided customers with privacy notices that inaccurately described how their nonpublic personal information would be used. As stated by FINRA, the firm shared sensitive customer information with non-affiliated third parties for marketing Marketing Marketing is defined as the business process of identifying, anticipating and satisfying customers' needs and wants.This is a crucial element of any operation or brokerage in…