Beginning in early 2020, M1 launched a three-year social media campaign with over 1700 influencers. The campaign's directive was for the influencers to share content with a special hyperlink to the company's website, which would enable prospective new clients to open and fund an M1 Finance brokerage account.

For each account that a consumer used the special link to open and finance, the influencers received a fixed payment. A total of 39,400 accounts were funded and opened during the campaign.

But other influencers posted things that weren't "fair and balanced, or contained exaggerated, unwarranted, promissory or misleading claims," according to Finra.As required by Finra regulations, M1 Finance did not examine or approve the substance of its influencers' posts before using or retaining those communications.

In order to resolve the first Finra enforcement case pertaining to social media influencers, M1 is paying $850,000. The business has not acknowledged or refuted the allegations.

"FINRA's rules on communicating with the public are especially critical as investors increasingly use social media to inform their financial decisions," states Bill St Louis, EVP and head of enforcement at Finra.