If you invested through SoFi Securities LLC and suffered financial losses, you may have legal options to recover your money in 2025 and beyond. SoFi Securities has faced multiple regulatory actions from FINRA and the SEC, including a $1.1 million fine in 2024 for failing to prevent fraud and a $700,000 settlement for securities lending violations. These enforcement actions demonstrate systemic compliance failures that may have harmed investors like you.
At Varnavides Law, we represent investors in claims against brokerage firms, including fintech platforms like SoFi Securities. With 10 years of experience defending broker-dealers at a major securities law firm, attorney Gary Varnavides understands how these companies operate from the inside, giving him unique insight into building successful investor claims.
Key Takeaways
- SoFi Securities paid $1.1 million in FINRA fines for customer identification failures that enabled $8.6 million in fraudulent transfers
- The SEC fined SoFi Wealth $300,000 for failing to disclose conflicts of interest when moving clients into proprietary ETFs
- Investors may file FINRA arbitration claims for negligence, breach of fiduciary duty, and failure to supervise
- The deadline to file a FINRA arbitration claim is generally six years from the event causing harm
- A securities attorney can evaluate your case during a free consultation
About SoFi Securities LLC
SoFi Securities LLC (CRD# 151717) is a self-directed brokerage firm based in San Francisco, California. The firm operates as an affiliate of SoFi Bank, N.A. and provides retail investment services through its SoFi Invest platform. Unlike traditional full-service brokerages, SoFi primarily offers automated, self-directed investing with limited human advisor interaction.
According to FINRA BrokerCheck, SoFi Securities has disclosed regulatory events on its record. Investors can review the firm’s complete regulatory history, including enforcement actions and customer complaints, through FINRA’s free BrokerCheck service.
SoFi Securities Firm Details
- CRD Number: 151717
- SEC Number: 8-68389
- Headquarters: San Francisco, CA
- Regulator: FINRA San Francisco Office
SoFi Platforms and Services
- SoFi Invest: Self-directed brokerage
- SoFi Money: Cash management accounts
- SoFi Wealth: Robo-advisory services
- Securities Lending: Fully paid lending program
FINRA Regulatory Actions Against SoFi Securities
SoFi Securities has faced multiple regulatory actions from FINRA for compliance failures. These enforcement actions provide important context for investors considering whether to pursue claims against the firm.
May 2024: $1.1 Million Fine for Customer Identification Failures
On May 2, 2024, FINRA filed a Letter of Acceptance, Waiver and Consent (AWC) against SoFi Securities for failing to establish and maintain reasonable customer identification and identity theft prevention programs. According to FINRA, the firm used a mostly automated process to approve account openings that left it vulnerable to fraud.
Impact of SoFi’s Compliance Failures: FINRA found that approximately 800 fraudulent accounts were opened through SoFi’s automated system. These accounts were used to transfer approximately $8.6 million from customers of other financial institutions, with $2.5 million successfully withdrawn before detection.
The violations occurred between December 2018 and April 2019. FINRA noted that SoFi’s system automatically approved applications even when applicants had invalid names, non-existent addresses, or high-risk email addresses and phone numbers. Some fraud alerts took up to 132 days to review, during which unauthorized withdrawals continued.
December 2023: $700,000 Settlement for Securities Lending Violations
In December 2023, FINRA sanctioned SoFi Securities as part of a broader enforcement action against four self-directed trading firms. According to FINRA’s announcement, SoFi failed to establish and enforce a supervisory system for its fully paid securities lending business.
| Violation | Details |
|---|---|
| Supervisory Failures | Failed to establish reasonable supervision for securities lending program |
| Misrepresentations | Distributed misleading documents about investor compensation to over 2 million customers |
| Suitability Issues | Enrolled all new customers in lending program without appropriateness criteria |
| Penalty | $500,000 fine plus $198,282.39 in customer restitution |
SEC Action Against SoFi Wealth
In August 2021, the Securities and Exchange Commission charged SoFi Wealth LLC with breaching fiduciary duties by failing to disclose conflicts of interest related to proprietary ETFs. The SEC’s order found that SoFi Wealth violated the Investment Advisers Act.
On April 12, 2019, SoFi Wealth transferred assets in approximately 20,000 client accounts from third-party ETFs into two new SoFi-sponsored ETFs. The SEC found that SoFi Wealth failed to disclose several material facts:
- SoFi Wealth preferred its proprietary ETFs over third-party options
- SoFi had an economic interest in the proprietary ETFs that created conflicts of interest
- Client assets were being used to help market the SoFi brand
- The decision to move clients into SoFi ETFs had already been made before disclosure
Tax Consequences: According to the SEC, over 15,000 SoFi Wealth clients incurred capital gains totaling approximately $772,000 in short-term gains and $662,000 in long-term gains as a result of the transfers. SoFi Wealth did not analyze tax impacts before making these changes.
SoFi Wealth agreed to a $300,000 civil penalty, a cease-and-desist order, and a censure without admitting or denying the findings.
Types of Claims Against SoFi Securities
Investors who suffered losses through SoFi Securities or SoFi Wealth may have grounds to file claims based on several legal theories. Understanding the types of investment fraud and securities law violations that apply to your situation is essential for building a strong case. The specific claims available depend on the circumstances of your case.
Failure to Supervise
Brokerage firms must reasonably supervise their operations and employees. SoFi’s regulatory violations demonstrate supervisory failures that may support investor claims.
Breach of Fiduciary Duty
Investment advisers owe fiduciary duties to clients. SoFi Wealth’s undisclosed conflicts of interest may constitute breach of fiduciary duty.
Negligence
Firms must act with reasonable care. SoFi’s failure to implement adequate security measures may constitute negligence that harmed investors.
Misrepresentation
FINRA found SoFi made misrepresentations about its securities lending program. Investors who relied on false information may have misrepresentation claims.
Unsuitable Recommendations
Brokers must ensure recommendations are suitable for each customer. Automatic enrollment in securities lending without suitability analysis may support claims.
Unauthorized Activity
Customers who experienced unauthorized transactions due to SoFi’s security failures may have claims for unauthorized account activity.
Common SoFi Customer Complaints
Beyond regulatory enforcement actions, SoFi customers have reported various issues that may give rise to legal claims. According to consumer complaint databases and regulatory filings, common complaints include:
- Account Closures: Sudden account closures without adequate explanation or opportunity to transfer assets
- Frozen Funds: Extended account freezes that prevent customers from accessing their money
- Transfer Problems: Delays or failures in transferring funds between accounts
- Inadequate Customer Service: Difficulty reaching support representatives or obtaining timely responses
- Identity Verification Issues: Legitimate customers experiencing access problems due to verification system failures
If you experienced any of these issues and suffered financial harm, you may have grounds to file a claim.
The FINRA Arbitration Process
Most brokerage customer agreements require disputes to be resolved through FINRA arbitration rather than court litigation. FINRA arbitration offers several advantages for investors pursuing claims against firms like SoFi Securities.
| Stage | Timeline | Description |
|---|---|---|
| Filing | Initial | Submit Statement of Claim, Submission Agreement, and filing fees to FINRA |
| Response | 45 days | SoFi Securities reviews claim and prepares formal response |
| Arbitrator Selection | 60-90 days | FINRA generates lists; parties rank and strike arbitrators |
| Discovery | 3-6 months | Document exchange between parties (streamlined compared to court) |
| Hearing | 1-5 days | Presentation of evidence and testimony before arbitration panel |
| Award | 30 business days | Panel issues binding decision |
| Payment | 30 days | Respondent must pay award or face FINRA suspension |
According to FINRA, most arbitration cases resolve within 12 to 16 months, significantly faster than court litigation which can take years.
Time Limits for Filing Claims
Understanding the deadlines for filing claims is critical for protecting your rights. Multiple time limitations may apply to your case.
Important Deadline: Under FINRA Rule 12206, claims must be filed within six years of the event giving rise to the dispute. However, state statutes of limitations may be shorter. California fraud claims generally have a three-year limitation period. Federal securities claims under Section 10(b) have a two-year limitation from discovery.
The sooner you consult with a securities attorney, the better your chances of preserving your legal rights. Waiting too long may result in your claims being time-barred regardless of their merit.
Why Gary Varnavides Handles Claims Against Brokerage Firms
Attorney Gary Varnavides brings a unique perspective to investor claims against brokerage firms. Before founding Varnavides Law, Gary spent 10 years at Sichenzia Ross Ference LLP defending broker-dealers, investment advisers, and their employees in regulatory investigations and customer disputes.
This experience provides several advantages when pursuing claims against firms like SoFi Securities:
Understanding Firm Defenses
Gary knows the strategies brokerage firms use to defend against investor claims because he has been on the other side. This insight helps anticipate and counter defense arguments effectively.
Regulatory Knowledge
Years of defending firms in FINRA and SEC matters provided deep knowledge of regulatory requirements and how violations affect investor claims.
Gary is licensed to practice in California and New York, and has been recognized as a Super Lawyers Rising Star from 2015 through 2023, an honor given to the top 2.5% of attorneys in the New York Metro area.
How We Evaluate SoFi Securities Claims
During a free consultation, we evaluate the strength of potential claims by analyzing several factors:
- Account Documentation: Reviewing statements, agreements, and communications with SoFi
- Loss Analysis: Calculating damages and determining recoverable amounts
- Regulatory Context: Connecting your losses to documented compliance failures
- Timeline Review: Ensuring claims fall within applicable limitation periods
- Evidence Assessment: Identifying documents and testimony needed to prove your case
Not every investment loss supports a viable claim. However, SoFi’s documented regulatory violations may strengthen cases involving similar issues to those cited by FINRA and the SEC.
What Recovery May Be Available
Investors who successfully prove their claims in FINRA arbitration may recover various forms of damages, depending on the circumstances of their case:
- Compensatory Damages: Recovery of investment losses directly caused by misconduct
- Interest: Prejudgment interest on losses from the date of harm
- Costs: Arbitration filing fees and other case-related expenses
- Attorney Fees: In some cases, particularly those involving statutory violations
The arbitration panel has discretion to award damages based on the evidence presented. An experienced securities attorney can help maximize your potential recovery.
Frequently Asked Questions About SoFi Securities Claims
What regulatory violations has SoFi Securities been cited for?
SoFi Securities has faced multiple regulatory actions. In May 2024, FINRA fined the firm $1.1 million for failing to maintain adequate customer identification and identity theft prevention programs. In December 2023, FINRA sanctioned SoFi for supervisory failures and misrepresentations related to its fully paid securities lending program, resulting in a $500,000 fine and approximately $200,000 in customer restitution. Additionally, the SEC fined SoFi Wealth $300,000 in 2021 for failing to disclose conflicts of interest when moving client assets into proprietary ETFs.
How do I know if I have a valid claim against SoFi Securities?
You may have a valid claim if you suffered financial losses connected to conduct similar to SoFi’s documented violations. This includes losses from unauthorized account activity due to security failures, damages from enrollment in the securities lending program without adequate disclosure, tax consequences from undisclosed ETF transfers, or account freezes that caused financial harm. A securities attorney can evaluate your specific circumstances during a free consultation.
What is the deadline to file a claim against SoFi Securities?
Under FINRA Rule 12206, claims generally must be filed within six years of the event giving rise to the dispute. However, state statutes of limitations may be shorter. California fraud claims typically have a three-year limitation period. Federal securities claims under Section 10(b) must be filed within two years of discovering the violation. Consulting an attorney promptly helps ensure you do not miss applicable deadlines.
Do I have to go through FINRA arbitration or can I sue in court?
Most brokerage customer agreements, including SoFi’s, contain mandatory arbitration clauses requiring disputes to be resolved through FINRA arbitration rather than court litigation. FINRA arbitration is typically faster and less expensive than court proceedings. Cases usually resolve within 12 to 16 months. A securities attorney can review your account agreement to determine the appropriate forum for your claim.
How long does FINRA arbitration take?
According to FINRA, most arbitration cases resolve within 12 to 16 months from filing to award. The timeline includes filing, a 45-day response period, arbitrator selection, discovery, hearings, and the panel’s decision. Cases that settle before hearing may resolve more quickly. Complex cases with multiple parties or issues may take longer.
What does it cost to pursue a claim against SoFi Securities?
We handle most investor claims on a contingency fee basis, meaning you pay no attorney fees unless we recover money for you. The fee percentage is discussed during your free consultation. You remain responsible for case costs, which may include FINRA filing fees, expert witnesses, and other expenses. We can discuss cost estimates and payment arrangements during your consultation.
Can I file a claim if SoFi closed my account without explanation?
Account closures alone may not support a legal claim. However, if the closure caused financial harm, such as being unable to sell securities during a market decline, you may have grounds for a claim. Additionally, if SoFi’s documented security failures contributed to your account being flagged or closed, this context may support your case. An attorney can evaluate whether your specific circumstances give rise to a viable claim.
What evidence do I need to file a claim?
Helpful evidence includes account statements showing your investments and losses, account agreements and disclosures, communications with SoFi including emails and chat logs, documentation of any complaints you filed, and records of how the misconduct affected you financially. Your attorney can help identify additional evidence needed and may obtain documents through the arbitration discovery process.
Contact a Securities Attorney About Your SoFi Claims
If you invested through SoFi Securities or SoFi Wealth and experienced losses, unauthorized activity, or other harm, we encourage you to contact Varnavides Law for a free case evaluation. We can review your situation, explain your legal options, and help you understand whether pursuing a claim makes sense for your circumstances.
Free SoFi Securities Claim Evaluation
Attorney Gary Varnavides has the experience and knowledge to evaluate claims against fintech brokerage firms. Contact us today to discuss your potential SoFi Securities claim during a confidential consultation.
Varnavides Law represents investors nationwide in FINRA arbitration claims. Prior results do not guarantee a similar outcome in your case.
