E*TRADE violations and fines

Who is Etrade

Financial services company E-Trade Financial Corporation (now part of Morgan Stanley) provides an electronic trading platform for stocks, preferred stocks, futures contracts, exchange-traded funds, options, mutual funds, and fixed-income investments. Further, it offers employee stock ownership plans, student loan benefit administration, advisor services, margin lending, and online banking. The firm receives revenue from interest income on margin balances, commissions from order executions, and payments for order flow.

E-Trade Baby advertising campaign

In E-Trade Baby, a baby talks about finance in an integrated advertising campaign. A key objective was to make the audience believe E-Trade was easy to use. Tor Myhren created the campaign, which appeared online, on television, and in print.

During Super Bowl XLII in January 2008, the company released advertisements featuring a baby, voiced by comedian Pete Holmes, discussing investing in an adult voice.

The baby made its return during a Super Bowl LVI commercial on February 13, 2022

Etrade made a huge mistake mocking meme stocks during their advert for this reason today we will take a look at some of Etrade's violations and fines.

Personal finances, get ready — we got some work to do. #ETRADEBaby pic.twitter.com/RGUzZIWsGV — E*TRADE Baby (@etradebaby) February 13, 2022

Violations

E*Trade Securities LLC was censured and fined $900,000 by the Financial Industry Regulatory Authority (FINRA) in 2016 for failing to conduct a sufficient review of the quality of execution of its customers' orders and for supervisory deficiencies concerning the protection of customer information.

E*Trade agreed to pay a $350,000 fine to the Financial Industry Regulatory Authority after allegations that it allowed manipulative customer trading to occur.

A consent letter signed by FINRA and E*Trade states that the company failed to establish and maintain a supervisory system for detecting potentially manipulative trading by its customers from February 2016 through November 2021. 

Without admitting or denying the accusations, the discount broker signed the letter.

E*Trade Financial Corporation paid  $2.5 million to settle SEC charges that they ignored red flags and improperly sold billions of unregistered penny stock shares on behalf of customers.

Securities and Exchange Commission claimed that E*Trade Securities and E*Trade Capital Markets, which later changed its name to G1 Execution Services LLC, failed in their role as a "gatekeeper" of securities and sold shares without properly verifying whether they met the exemptions required by law to sell such shares to the public.