- Robinhood has reached a settlement to pay a maximum of $10.2 million to resolve allegations of compliance issues within its brokerage unit during service outages in March 2020. The case was brought forth by a group of securities regulators from multiple states. Robinhood agreed to the settlement without acknowledging or denying the allegations made by state authorities who conducted their investigation under the North American Securities Administrators Association.
- Robinhood has agreed to provide state authorities access to its compliance report, which was created under the settlement it reached with the industry self-regulator Finra in June 2021. The report pertained to a $70 million fine that Robinhood received for various compliance deficiencies, including providing customers with false or misleading information, approving millions of customers for high-risk options trading, and service outages.
Why it matters
State regulators cited compliance problems in Robinhood's brokerage, such as the dissemination of inaccurate information, the inadequate supervision of its technology, and slow customer responses. Robinhood's trading platform failed in March 2020, preventing users from accessing accounts and executing trades, leading to unexpected losses for some traders.
