TradeStation Securities, Inc. has agreed to pay a fine of $85,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

From July to September 2022, TradeStation Securities distributed communications regarding crypto assets and crypto asset-related services offered by its affiliate. The affiliate required customers who wished to purchase crypto assets to maintain brokerage accounts with TradeStation Securities. TradeStation Securities’ communications concerning crypto assets and crypto asset-related services included webpages, emails, and content posted on social media platforms.

During the relevant period, TradeStation Securities distributed several communications that violated one or more of the content standards in FINRA Rule 2210. Most of the violative communications failed to prominently disclose that the crypto assets were not offered by TradeStation Securities, but were offered by an affiliate which, unlike TradeStation Securities, was not a registered broker-dealer or member of FINRA or SIPC.

Certain content on the firm’s website describing crypto asset-related services did not clearly state what entity offered crypto assets.

For example, one page on TradeStation Securities’ website contained the statement: “TradeStation provides award-winning trading and analysis platforms and sell~clearing online brokerage services for stocks, ETFs, Equity and index options, commodity and financial futures, futures options, and cryptocurrencies.” This statement failed to distinguish between the products and services offered by the firm and those offered by its affiliate.

Similarly, the firm posted a video to a social media platform which included the statement, “TradeStation is a high-quality and hassle-free platform that allows you to buy, sell, and trade many types of stocks, ETFs, and several cryptocurrencies.” This communication could potentially have confused retail investors about which entity was offering the services and what regulations and protections applied.

In addition, some of the violative communications discussed crypto assets offered through the affiliate without a balanced description of the associated risks of investing in those assets.

TradeStation Securities’ affiliate ceased offering crypto assets after the relevant period and, as a result, TradeStation Securities ceased distributing retail communications concerning crypto assets offered by its affiliate.

By distributing the retail communications described above, TradeStation Securities violated FINRA Rules 2210(d)(l)(A), 2210(d)(l)(B), 2210(d)(3), and 2010.

In addition to the $85,000 fine, the firm has agreed to a censure.