Stockpile Investments, Inc has agreed to pay a fine of $50,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).
From July to September 2022, Stockpile Investments distributed communications regarding crypto assets and crypto asset-related services offered by an unaffiliated entity that violated one or more of the content standards in FINRA Rule 2210.
These communications included a webpage, email, and the firm’s mobile application interface and related promotional materials.
Most of the communications failed to prominently disclose that the crypto assets were not offered by Stockpile Investments, but were offered by an unaffiliated entity which, unlike Stockpile Investments, was not a registered broker-dealer or member of FINRA or SIPC.
For example, Stockpile Investments sent an email to potential customers announcing the launch of the Stockpile’s mobile application which contained the statement “Stockpile is the only place where kids can choose from over 30 cryptocurrencies or redeem Stockpile gift cards from both crypto and stock.” This statement failed to distinguish between the products and services offered by the firm and those offered by the unaffiliated entity.
Similarly, Stockpile Investments’ website included the statement “Family and friends can help contribute to your child’s financial future. Stockpile offers gift cards for investing in stocks or crypto.” This statement could potentially have confused retail investors about which entity was offering the services and what regulations and protections applied.
In addition, some of the violative communications discussed crypto assets offered through the unaffiliated entity without a balanced description of both the benefits and the associated risks of investing in those assets.
Therefore, Stockpile Investments violated FINRA Rules 2210(d)(1)(A), 2210(d)(1)(B), 2210(d)(3), and 2010.
On top of the $50,000 fine, the firm has agreed to a censure.
Stockpile Investments has been a FINRA member since 2012. The firm provides an app-based trading platform to retail customers. Stockpile Investments is headquartered in San Francisco, California and has eight registered representatives in one office.
