Moomoo Settles with FINRA for $750,000 Over Social Media Violations

Moomoo Financial Inc., formerly known as Futu Inc., has agreed to a $750,000 settlement with the Financial Industry Regulatory Authority (FINRA) over multiple regulatory violations. The firm was found to have paid social media influencers to promote its services between January 2020 and the present, but failed to ensure the content was compliant with FINRA rules.

FINRA's investigation revealed that influencers' posts on platforms like Instagram and Twitter were not fair, balanced, or accurate, with some making misleading or promissory claims about Moomoo's services. Furthermore, Moomoo Financial did not have a registered principal review or approve influencer content before it was posted, violating multiple FINRA rules and securities regulations.

The firm also failed to maintain records of influencer communications and did not file required options communications with FINRA. In addition, Moomoo Financial lacked a robust system to supervise social media communications, which contributed to these violations.

In addition to the fine, Moomoo Financial has agreed to undergo a censure and to implement a supervisory system to ensure future compliance. A senior management member will also certify that the firm has remediated the issues.

The settlement also covers privacy policy violations, as the firm did not provide privacy notices to around 450,000 customers between January 2018 and December 2021, further breaching regulatory standards.