On December 11, 2025, the Financial Industry Regulatory Authority, Inc. (“FINRA”) issued a report on social media‑influenced investing (the “Report”).  FINRA observes that an increasing number of investors report that social media content directly impacts their investing decisions; this trend is especially pronounced among younger investors. The Report summarizes the findings of a FINRA staff research initiative to assess the impact of social media on investing, including with respect to member firm practices.  It builds on the FINRA Investor Education Foundation’s 2025 study on how investors evaluate information.  The Report includes FINRA’s findings based on its engagement with more than two dozen parties, including financial institutions, software service providers, academics, industry observers, and government entities.  Below we summarize the Report’s key findings.

FINRA seeks input from market participants that are currently exploring social media-influenced investing or other use cases in the securities industry.  FINRA requests comments on the Report by May 13, 2026.

Social Media Tools Used in the Securities Industry

Market participants, including member firms, use social media tools for various purposes, including to provide general investment information, market the firm’s services, inform research, and influence investment decisions.  The Report breaks these tools into three major categories:

Social Media Communication Platforms.  Online and app-based platforms that allow investors to communicate with other individuals or groups about investing include investing chat groups and forums.  Some exist on social media channels, others are featured as part of social media channels specifically focused on investing, and others are hosted on member firm platforms.  While these platforms allow investors to share ideas on investment strategies and opportunities, they often are linked to the development of trading strategies, such as copy trading and meme stock trading.  In addition to chat rooms and forums, investors also rely on “finfluencers” – that is, individuals on social media with large followings – to provide information and/or advice on financial matters.  FINRA notes that these sites may contain inaccurate, misleading, harmful or intentionally false information.  FINRA also notes that social media influencers may present risks due to, for example, a lack of qualifications or conflicts of interest.

In this connection, FINRA highlighted certain risks relating to social media influencers in its 2026 Annual Regulatory Oversight Report (see our Legal Update here).  Additionally, both FINRA and the Securities and Exchange Commission have brought enforcement actions against firms for failures relating to their social media influencer programs (see our post here).

Sentiment Analysis Tools.  The Report comments in some detail on sentiment analysis tools used by financial institutions and may be the most detailed discussion regarding this topic from FINRA to date.  The Report notes many financial institutions leverage sentiment analysis tools to analyze large social media datasets in an attempt to uncover emerging trends, gauge investor sentiment, and identify potential trading opportunities.  Financial institutions have developed proprietary sentiment analysis tools to extract and analyze social media data, which they use to inform trading and investing decisions and/or make available to investors (e.g., real-time social sentiment indicators).  Some financial institutions have launched indices that are sentiment-based or other products and services that provide clients with sentiment scores, trend analysis and market intelligence for research, market surveillance, and other purposes.

Financial Product Innovations.  Many market participants, including member firms, offer financial products designed to capitalize on social media-driven investment trends or to provide indices that track popular holdings.  These indices can then become the reference assets for exchange-traded funds.  The Report cautions that investors should consider, among other things, their financial situation and risk tolerance.

Potential Benefits and Risks

According to the Report, the growing influence of social media on investing activities presents both benefits and risks that member firms and investors should consider.  Potential benefits include increased access to investment information, improved engagement and understanding of financial services, and opportunities to identify emerging trends. Potential risks include misinformation and lack of transparency in social media investment content, exploitation by bad actors (e.g., pump-and-dump schemes), and overreliance on information from social media. Additionally, limitations of current social media sentiment analysis tools may lead to inaccurate information and data quality issues.

Regulatory Considerations

To the extent that FINRA member firms offer or use social media techniques, such as sentiment analysis tools, FINRA reminds its member firms that FINRA’s rules are intended to be technology neutral and the securities laws continue to apply. The specific rules applicable to member firms’ use of social media will vary, depending on how member firms deploy its use. FINRA member firms are encouraged to be mindful of the potential implications for their regulatory obligations as they consider using  social media techniques, including those outlined in the Report.