The Robinhood online negotiation platform has agreed to pay $ 29.75 million to settle several probes from the Financial Industry Regulatory Authority (FINRA) linked to the company’s supervision and compliance practices.
The regulation figure included a civil fine of $ 26 million and a restitution of $ 3.75 million to customers, finra said on March 7. Robinhood did not “respond to the red flags of potential misconduct,” said Finra, leading to anti-white and supervision and disclosure violations.
Finra noted that Robinhood Financial has failed to supervise its compensation system despite notable delays due to the increase in demand between March 2020 and January 2021, which coincides with the moment when Robinhood has restricted trading in so -called memes actions such as Gamescop (GME) and AMC Entertainment Holdings (AMC).
Finra said that Robinhood Financial and Robinhood Securities had also not detected, investigating or reporting manipulative professions, movements and suspicious cases in money where customer accounts have been taken up by third -party hackers.
Robinhood Financial has also proven to have opened “thousands of accounts” when he had not reasonably verified the identity of the customer, said Finra.
As such, Robinhood has failed to establish and implement reasonable money laundering programs, added the financial regulator.
Robinhood has not “reasonably supervised and preserved”, “social media by promoting publications of paid social media influencers, added the Finra.
“Some of these communications included statements that were promised or unresolved and balanced, and therefore misleading for investors.”
Extract from the Finra survey on Robinhood. Source: Finish
The $ 3.75 million in restitution resulted from Robinhood Financial Providing customers with inaccurate or incomplete disclosure through “collage” market orders by converting them into orders.
Robinhood Financial and Robinhood Securities agreed at the entry of finra conclusions without admitting or denying the accusations.
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This occurs only two months after two Robinhood entities concluded a regulation of $ 45 million with the American securities regulator on January 13 after a survey accused the company of having violated more than 10 provisions of securities law.
Robinhood Financial and Robinhood Securities “admitted certain conclusions” in this survey, which accused them of not having maintained and preserving electronic communications of customers between 2020 and 2021, among others.
Meanwhile, Robinhood declared a net income of $ 916 million to the company and more than a billion dollars in revenues in the fourth quarter of 2024.
Crypto’s revenues have represented $ 358 million in revenues based on Robinhood transactions of $ 672 million – an increase of 200% in annual slip – while crypto negotiation volumes increased by 450% in annual shift for $ 71 billion.
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