Robinhood Agrees To Settle $10.2 Million Fine For US States
- Robinhood will pay a $10.2 million fine after an investigation by seven state securities regulators found the company harmed investors.
- The investment platform’s shutdown in March 2020 sparked a fierce investigation.
Following an investigation by seven state securities authorities on the company’s platform breakdowns in March 2020, which harmed “main street investors,” Robinhood will pay $10.2 million in fines.
The agreement was reached following a NASAA investigation, overseen by state securities regulators from Alabama, Colorado, California, Delaware, New Jersey, South Dakota, and Texas.
There were issues on this platform in March 2020, which sparked the investigation. At the time, hundreds of thousands of investors relied on the Robinhood app to complete deals. Before March 2021, Robinhood also had problems with its review and approval processes for options and margin accounts, flaws in its monitoring and reporting tools, and improper customer service and escalation procedures that occasionally prevented users from making trades even though the value of specific stocks were declining.
“Today’s multistate agreement represents states at their best – working together for the benefit of Main Street investors,(…) Robinhood repeatedly failed to serve its clients, but this settlement makes clear that Robinhood must take its customer care obligations seriously and correct these deficiencies.” NASAA President Andrew Hartnett said.
This company neither acknowledges nor denies the findings outlined in the Order of the States.ư
Robinhood will provide access to FINRA-requested compliance deployment reports to countries in the settlement. The company also hired an independent compliance consultant, who made the remedial recommendations that platform typically does.
Recently, 0x Labs, a blockchain company that builds the infrastructure for the decentralized exchange (DEX) ecosystem, launched the TX-Relay API in beta. The API aims to improve the speed and reliability of peer-to-peer trading on decentralized exchanges. As the first partner, Robinhood Wallet will integrate with the API to enable faster and more reliable transactions for their users.
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