The California Department of Financial Protection and Innovation (DFPI) announced that Robinhood Financial LLC reached a settlement agreement with several U.S. states, including state securities regulators in Alabama, Colorado, California, Delaware, New Jersey, South Dakota and Texas.
Robinhood will pay up to $10.2 million in fines for its platform operations and technical failures.
In March 2020, the Robinhood platform went down. In addition, prior to March 2021, Robinhood had deficiencies in its review and approval process for options and margin accounts, flaws in the companyâs monitoring and reporting tools, and inadequate customer service and escalation protocols, which in some cases resulted in Robinhood users being unable to process trades. Robinhood neither admitted nor denied the allegations.
Robinhood will provide the settlement states with compliance enforcement reports required by FINRA. Robinhood has hired an independent compliance consultant who made remedial recommendations, which Robinhood has largely implemented. (Planet Daily)
