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Enforcement & Fines by Loffa Interactive Group

TradeZero America's $250K FINRA Fine: Influencer Videos, Forum Posts, and a Privacy Notice

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Updated October 2026. First published June 2024.

On June 10, 2024, FINRA accepted a Letter of Acceptance, Waiver, and Consent from TradeZero America, Inc. (AWC No. 2021072581301). The firm was censured and fined $250,000, without admitting or denying the findings.

TradeZero is a small firm. It offers self-directed online trading and has 28 registered representatives at one branch in Brooklyn. Its influencer program brought in about 575 accounts. Like the M1 Finance case three months earlier, it came out of a FINRA exam of how firms acquire customers through social media, and the influencer findings overlap. Two parts are different, and they're the reason to read this one: posts in interactive forums that no one reviewed, and a privacy notice that didn't match what the firm did with customer data.

What the Influencers Posted

Between July 2020 and October 2022, TradeZero paid several influencers to promote it, including one whose platforms had millions of viewers. It gave each a unique referral link, graphics, and "talking points." The talking points listed the firm's day-trading features and left out the risks of day trading.

The posts followed the talking points. In a July 2020 video, one influencer said TradeZero was for "people who want to trade and make billies," not "grandmas and grandpas who trade, like, one stock." In another, the same influencer said he was up several thousand dollars without "even trying." FINRA found those statements exaggerated and promissory, and said they misleadingly suggested viewers could do as well by day trading on TradeZero. Other posts called TradeZero a "free web trading platform" without disclosing that fees may apply or linking to the fee schedule. Some posts didn't disclose that they were advertisements, which Regulatory Notice 17-18 says firms should do.

FINRA found violations of Rule 2210(d)(1) and Rule 2010.

Videos and Forum Posts Take Different Review Paths

Rule 2210 treats influencer content in two ways, and TradeZero had a process for neither.

TradeZero's influencer videos were retail communications. Under Rule 2210(b)(1)(A), a qualified registered principal has to approve each one before it's used. TradeZero's WSPs didn't require any principal to approve influencer videos, and the firm had no system for doing it.

A post in an online interactive electronic forum is treated differently. Under Rule 2210(b)(1)(D)(ii), it doesn't need preapproval, provided the firm supervises and reviews it the same way it supervises correspondence under Rule 3110(b) and Supplementary Material .06 through .09. TradeZero didn't review those posts at all, and its WSPs didn't require it.

The firm also kept no record of either kind, or of the dates they were used. Rule 2210(b)(4)(A) requires a firm to keep its retail communications with their dates of first and last use. FINRA found violations of Exchange Act Section 17(a), Rule 17a-4(b)(4), and FINRA Rules 2210(b), 3110, 4511, and 2010. TradeZero has since changed its procedures to require a principal to approve all influencer posts before use and to keep them with their dates of use.

What to check: whether your procedures say which path each kind of influencer content takes, and who owns each one. A forum post that skips preapproval still needs a reviewer.

The Privacy Notice Didn't Match the Marketing Data

This is the finding with no counterpart in the M1 case. Between January 2020 and January 2022, at least 22,000 customers opened accounts at TradeZero. Each received a privacy notice that said the firm disclosed nonpublic personal information "only when it is both permitted by law and required for the ordinary course of business."

During that period, TradeZero shared customers' names, email addresses, Social Security numbers, birthdates, and state IDs, among other information, with a non-affiliated service provider to develop marketing campaigns. The notice didn't say the firm might share customer information with third parties for marketing. FINRA found that TradeZero failed to disclose the categories of information it would share and the non-affiliated third parties it would share them with, in violation of Rule 4 of Regulation S-P and FINRA Rule 2010. The firm corrected the notice in January 2022.

The AWC doesn't say who at TradeZero owned the notice or the vendor feed. Either way, for two years the notice described one practice and the marketing program followed another. FINRA's February 2023 sweep update lists practices that address this: privacy notices that name the categories of information shared and the kinds of third parties that receive it, opt-outs that the firm honors, and written agreements limiting how third parties use non-anonymized data.

What to check:

  • List every feed of customer data to a non-affiliated party, including marketing, analytics, and advertising vendors, with the fields each one gets.
  • Compare that list with the categories and recipients your privacy notice describes. Update the notice or stop the feed.
  • Ask why a marketing vendor needs Social Security numbers and birthdates. If it doesn't, don't send them.
  • Put the comparison on a schedule. Feeds change when vendors change, and the notice doesn't update itself.

Data leaving through employees is a different problem with its own Regulation S-P rule. The Ceros Financial case covers that one.

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.

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