Robinhood’s online trading platform has agreed to pay $ 29.75 million to resolve some probes from the Financial Industry Regulatory Authority (FINRA) related to administration and compliance with the company.
The regulating figure consists of a $ 26 million civil fine and $ 3.75 million payments to customers, Finra Says On March 7. Robinhaood failed to “respond to red flags of potential misconduct,” said Finra, leading to anti-money laundering and supervisory and breaking into breach.
Finra Found that Robinhood Financial failed to justify the cleaning system despite the observance of remarkable processing delays due to increased demand between March 2020 and January 2021, which at the same time prevented Robinhood meme stock like gamestop (GME) and AMC Entertainment Holdings (AMC).
Finra said Robinhood Financial and Robinhood Securities also failed to detect, investigate or report manipulative trading, suspicious money movements and opportunities where customer accounts were taken by third-party hackers.
Robinhood Financial was also found to open “thousands of accounts” without it reasonably proven customer identity, Finra said.
As a result, Robinhood failed to promote and implement reasonable anti-money laundering programs, the financial regulator added.
Robinhood also failed to “rational and maintain” social media communication by promoting posts from paid social media influencers, Finra added.
“Some of these communications include promissory or unfair and balanced statements, thus misleading investors.”
Excerpt from Finra’s investigation into Robinhood. Source: Finra
The $ 3.75 million restoration results from Robinhood Financial that provides customers who are inaccurate or incomplete disclosure through “collaring” market orders by converting them to limit orders.
Both Robinhood Financial and Robinhood Securities agreed to enter Finra’s findings without admitting or rejecting the charges.
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It only comes two months after two robinhood entities that reached a $ 45 million negotiating with US SECURITIES REGULATOR On January 13 after an investigation accused the company of violating more than 10 security law provisions.
Robinhood Financial and Robinhood Securities “admitted to some findings” in that investigation, accusing them of failing and maintaining electronic communications from customers Between 2020 and 2021, among other things.
Meanwhile, Robinhood reported a company record $ 916 million net income and more than $ 1 billion in the fourth quarter of 2024.
Crypto revenue costs $ 358 million of $ 672 million Robinhood-based revenue — a 200% year-to-year increase-while volume of crypto trading Rose 450% year-on-year up to $ 71 billion.
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