- This topic has 2 replies, 2 voices, and was last updated 2 years, 4 months ago by
.
-
Robinhood trading app hit with $70M penalty for ‘misleading’ customers
Robinhood, the retail trading platform at the centre of the GameStop meme stock saga, has been hit with a $70 million penalty by the Financial Industry Regulatory Authority, though for reasons unrelated to GameStop. FINRA has ordered Robinhood’s owners to pay a fine of $57 million and $12.6 million plus interest in restitution to its customers for what it calls “systemic supervisory failures and significant harm”. pg slot
The Robinhood trading app profited from the increased popularity of retail day trading during the Covid-19 pandemic and the associated rise of “meme stock” trading organized by communities of speculators like the WallStreetBets subreddit. Between March of last year and now it’s gone from 13 million users to 31 million.
FINRA’s press release described the penalty as the largest it’s ever leveraged, and explained the size of the fine and restitution was arrived at after considering “the widespread and significant harm suffered by customers, including millions of customers who received false or misleading information from the firm, millions of customers affected by the firm’s systems outages in March 2020, and thousands of customers the firm approved to trade options even when it was not appropriate for the customers to do so.”
- You must be logged in to reply to this topic.
