FINRA Updates its Sweep on Social Media Influencers, Customer Acquisition and Related Information Protection

On February 28, 2023, FINRA provided an update for its sweep on Social Media Influencers, Customer Acquisition and Related Information Protection. 

In September 2021, FINRA launched a sweep to review firms’ practices related to their acquisition of customers through social media channels, as well as firms' sharing of customers’ usage information with affiliates and non-affiliated third parties. This update provides findings from its review. FINRA suggests several best practices for brokerage firms to evaluate their social media influencer and referral programs, for example, evaluating potential social media influencers’ backgrounds and prior public social media activities for compliance and reputational risks before admitting them into the firm’s social media influencer programs. FINRA also addressed firms’ privacy notices (and options to opt out) regarding the collection and sharing of their usage information.