TradeZero America, Inc. has agreed to pay a fine of $250,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

Between July 2020 and October 2022, TradeZero America paid individuals with followings on social media sites (commonly known as “influencers”) to promote the firm in social media communications. Such influencers posted social media communications on the firm’s behalf that were not fair and balanced or that made exaggerated or promissory claims. Therefore, TradeZero America violated FINRA Rules 2210(d)(l) and 2010.

During that same period, 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.

TradeZero America also failed to establish, maintain, and enforce a system, including written supervisory procedures (WSPs), reasonably designed to supervise retail communications disseminated on the firm’s behalf by its influencers. Therefore, the firm violated the Securities Exchange Act of 1934 Section 17(a), Exchange Act Rule l 7a- 4(b)(4), and FINRA Rules 2210(b), 4511, 3110, and 2010.

In addition, between January 2020 and January 2022, TradeZero America provided customers with privacy notices that inaccurately stated the extent to which the firm would use their nonpublic personal information in violation of Regulation S-P of the Securities Exchange Act of 1934 Rule 4 (17 CFR § 248.4) and FINRA Rule 2010.

On top of the fine, the firm has agreed to a censure.