Vladhood, CEO of Robinhood
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Robinhood Markets Inc. is paying a fine to investigate the options trading options and the disruptions the stock trading program suffered in March 2020, according to a security statement.
The Securities and Exchange Commission, State Regulators and the Financial Industry Regulatory Authority, Wall Street’s self-regulating arm, are investigating Robinhood’s behavior in these matters, including how Robinhood ‘discloses cash and purchasing power to clients and the approval processes of its options,’ the company said in a statement. the submission said.
Separately, the New York Financial Regulator and Attorney General, among other regulators, are investigating cases of unauthorized actors taking over the accounts of Robinhood users.
Two subsidiaries – Robinhood Financial and Robinhood Securities – are currently negotiating a settlement with Finra over the interruptions and options trading options, which include complaints of breaches of Finra rules, a fine, customer restitution and the hiring of a compliance consultant can include.
According to the submission, the sins could lead to losses of at least $ 26.6 million.
Robinhood has come under fire over how it deals with customer options trading. Alex Kearns, a 20-year-old student, died last summer of suicide after thinking he had suffered a major loss of options for Robinhood.
His family recently filed a wrongful death lawsuit against Robinhood, accusing him of contributing to the death of Mr. Kearns through ‘misleading communication’ about its investments and ‘virtually non-existent’ customer service. They are claiming unspecified damages.
Robinhood executives and other companies testified before Congress on Thursday after January’s trade rush over GameStop and other securities expressed concern about the integrity of the U.S. stock market and the rules that apply to it. Photo illustration: Ang Li (Originally published on February 18, 2021)
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