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Regulatory Compliance by Loffa Interactive Group

M1 Finance's $850K FINRA Fine: Paid Influencers' Posts Are the Firm's Ads

A dandelion seed head stands against a dusk sky as hundreds of glowing seeds drift away across a meadow.

Updated October 2026. First published March 2024.

In March 2024, FINRA fined M1 Finance LLC $850,000 over posts by social media influencers it paid to promote the firm. FINRA called it the first formal FINRA Enforcement disciplinary action involving a firm's supervision of social media influencers. M1 settled through a Letter of Acceptance, Waiver, and Consent (AWC No. 2021072581101, accepted March 15, 2024), without admitting or denying the findings.

The case grew out of a targeted exam that FINRA launched in September 2021 on how firms acquire customers through social media. The question it answers: when does an influencer's post become the firm's own communication?

How the Program Worked

Between January 2020 and April 2023, M1 paid about 1,700 influencers more than $2.75 million. Each got a flat fee for every new account opened and funded through a unique link, with no cap on what an influencer could earn. More than 39,400 accounts came in that way.

M1 also gave influencers graphics and a "Welcome Guide" to make their posts more effective. The guide highlighted the lack of commissions and management fees and the margin lending program, and invited influencers to ask for more promotional ideas.

Why the Posts Were M1's Ads

FINRA's Regulatory Notices 10-06 and 17-18 say a third party's social media post is a firm communication if the firm paid for it or helped prepare it ("entanglement"), or if it endorsed or approved the content ("adoption"). Under Rule 2210(a)(5), a written communication that reaches more than 25 retail investors within 30 calendar days is a retail communication.

M1 paid per funded account, supplied the link and the graphics, and briefed influencers on what to feature. That made the posts retail communications of M1, subject to the same content, approval, and recordkeeping rules as anything its marketing department published.

What the Posts Said

The AWC describes several posts that FINRA found weren't fair and balanced, or were exaggerated, promissory, or misleading under Rule 2210(d)(1):

  • An influencer promoting margin lending said customers "can pay [margin loans] back at any given time . . . there is no set time period." In fact, customers get no extension of time to meet margin requirements, and the firm can raise the maintenance requirement, force a sale, and choose which securities to sell, all without contacting the customer.
  • Other posts called M1's margin rates low without saying the rates could change.
  • Posts said accounts had "no fees" or that you could "trade for free," with no disclosure that other fees may apply and no prominent link to the fee schedule. FINRA's Regulatory Notice 13-23 had already said that calling accounts "free" is generally inconsistent with Rule 2210.
  • An influencer showing viewers how to open a Roth IRA said anyone who starts one in their 20s "will become a millionaire by the time they're 60," with no balanced discussion of risk.

The guide pointed influencers at margin lending, and margin is where one of the worst posts went wrong. If your briefing material features a product, it has to carry that product's risks too, because an influencer will repeat the features and may leave out the rest.

What M1 Didn't Have

Rule 2210(b)(1)(A) requires a qualified registered principal to approve each retail communication before it's used. No principal at M1 reviewed influencer posts before they went up. M1 also didn't keep the posts. Exchange Act Rule 17a-4(b)(4) requires a broker-dealer to keep communications subject to SRO rules on communications with the public for at least three years. Rule 2210(b)(4)(A) adds the dates of first and last use, and the name of the approving principal and the date of approval.

M1's written supervisory procedures covered retail communications in general but didn't require preapproval or recordkeeping for influencer posts. FINRA found violations of Rules 2210(d)(1), 2210(b), 3110, 4511, and 2010, Exchange Act Section 17(a), and Rule 17a-4. In April 2023, M1 changed its procedures to require principal approval of influencer posts before use and started retaining them.

Besides the censure and fine, M1 agreed to an undertaking. Within 180 days, a member of senior management who is a registered principal had to certify in writing that the firm had fixed the issues and put in place a supervisory system reasonably designed to comply with Rule 2210, with a narrative and supporting exhibits.

Before You Pay the First Influencer

If you run an influencer or affiliate program, or plan to, check these against the AWC:

  1. The contract requires the influencer to submit each post before it goes up, and a principal approves it. Record the principal's name and the approval date.
  2. You capture the post as published on the influencer's account, with its dates of first and last use. A copy of the approved draft isn't the same record.
  3. Your briefing material meets Rule 2210 on its own: no "free" without the fee disclosure, and risk language beside every product it features.
  4. Your review staff can keep up. Approving posts from 1,700 people is a staffing question, and it's better answered before the program grows than after.
  5. Your WSPs name influencer posts specifically. M1's general retail communications procedures didn't reach them.

Three months later, FINRA settled a second influencer case, with TradeZero America. It adds two problems M1's case didn't have: posts in interactive forums that nobody reviewed, and a privacy notice that didn't match how the firm shared customer data.

This post is for informational purposes only and does not constitute legal advice. For guidance on specific regulatory obligations, consult your counsel or compliance advisor.

Related reading: SEC Rule 17a-4 and FINRA Rule 3110.

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