Open to the Public Investing, Inc has agreed to pay a fine of $350,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

From January 2020 to at least September 2022, Public Investing paid individuals with followings on social media sites (commonly known as “influencers”) to promote the firm in social media communications.

Some of those communications included statements that were not fair and balanced or made claims that were misleading or unwarranted.

Public Investing’s influencers posted communications claiming that the firm offered “commission free trades” but did not disclose that other fees may apply or provide a link to the firm’s fee schedule.

In addition, some influencers promoted the ability to buy fractional shares through Public Investing but did not disclose certain limitations associated with investing in fractional shares, including, for example, that fractional shares may not be transferable to another broker-dealer.

Further, several posts also failed to clearly identify the communications as paid advertisements.

Therefore, the firm violated FINRA Rules 2210(d) and 2010.

From January 2020 to March 2023, Public Investing also did not review and maintain records of all retail communications disseminated on the firm’s behalf by its influencers, and failed to establish, maintain, and enforce a reasonably designed supervision system with respect to such communications.

Therefore, the firm violated the Securities Exchange Act of 1934 § 17(a), Exchange Act Rule 17a-4, and FINRA Rules 2210(b), 4511, 3110, and 2010.

For these violations, Public Investing was censured, fined $350,000, and required to comply with an undertaking.

Open to the Public Investing, Inc. (Public Investing), which became a FINRA member in 2004, provides self-directed trading to retail investors through its mobile application and website. Headquartered in New York, New York, the firm has one office and 31 registered representatives.