FINRA Announces New Exam Sweeps Are on the Way

At the end of July 2021, the Financial Industry Regulatory Authority (FINRA) announced that the agency would launch new regulatory sweeps focusing primarily on Special Purpose Acquisition Companies (SPACs). FINRA maintains that these efforts align with its commitment to remain in step with constantly evolving business models, technologies, and investment opportunities.

Understanding the Rationale

According to FINRA’s president and CEO, Robert Cook, “We’ve been interested in options about account opening compliance; that will be one sweep that we intend to do…[focusing on] the due diligence that’s being conducted in that space.” He also stated that FINRA continues “to be interested in the SPAC space and the conflicts of interest that might be there,” and maintains that FINRA may conduct a sweep in that space as well. Essentially, these sweeps are intended to keep FINRA relevant and current with evolving products, fee arrangements, and investing models.

Focusing on Social Media Influencers

In addition to sweeps that focus on SPACs, FINRA intends to perform a sweep pertaining to paid social media influencers. In the wake of the flurry of social media attention surrounding consumer-generated volatility among GameStop and other stocks, Cook stated that FINRA would focus on “how firms supervise activities and communications related to paid social media influencers.” Additionally, FINRA will monitor options account opening compliance issues, focusing on “due diligence” conducted by firms in this field.

Looking Forward

While Cook did not specify a timeline pertaining to these sweeps, many industry experts believe that FINRA will take Enforcement actions primarily to showcase their continued relevance. If you need help understanding what these recently announced sweeps may mean for you, enlist the assistance of a trusted securities law attorney who can answer your questions.


Discuss your situation with an experienced securities law attorney today by calling Judex Law LLC at (303) 523-4022.

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