DriveWealth Fined by FINRA for Transfer Failures Amid Broader Expansion

US fintech brokerage firm DriveWealth has been fined $100,000 and censured by the Financial Industry Regulatory Authority (FINRA) for failing to process over 1,200 customer account transfer requests between June 2020 and October 2022. According to FINRA, these delays stemmed from DriveWealths reliance on a third-party clearing partner who lacked access to individual client data, resulting in transfer requests being purged from the system.

Under FINRA Rule 11870, firms are obligated to process Automated Customer Account Transfer Service (ACATS) requests in a timely manner. DriveWealths failure to comply was deemed a breach of regulatory standards. Although the company neither admitted nor denied the findings, it has accepted the sanction and resolved the issue by terminating the third-party relationship in 2022 and handling transfers internally.

This compliance shortfall comes amid DriveWealths continued global expansion. The firm has recently secured a brokerage license in Europe via the Bank of Lithuania, enabling it to offer Brokerage-as-a-Service across the EU. Additionally, DriveWealth has expanded its 24/5 and overnight trading offerings, launched options trading, and integrated with major EMS and telecom providers to enhance execution efficiency.

While DriveWealths innovations in embedded finance continue to draw attention, this case underscores the importance of maintaining strong operational and compliance controls—particularly as fintechs scale across borders.