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A Wall Street regulator has ordered Robinhood to pay more than $ 70 million to the retail platform because it said its damage is “extensive and significant”.
Finra announced Wednesday that it was imposing a $ 57 million fine on Robinhood, and ordered it to pay interest on the return of $ 12.6 million plus customers, the largest penalty ever imposed by the financial regulator.
The fine is the same as the total amount charged by the regulator for 2020.
Since the start of the Robinhood pandemic, retail has become synonymous with the rise of day-to-day trading. Finra complained that the broker provided misleading information to customers, and complained that numerous technical failures on the platform during periods of high volatility have harmed customers.
Robinhood also allowed thousands of customers to market dangerous derivative products when it was “not appropriate” for them.
“This action sends a clear message: All Finra member companies, regardless of size or business model, must comply with the rules governing the brokerage industry,” said Jessica Hopper, head of Finra’s enforcement department. “Compliance with these rules is not optional and cannot be sacrificed for innovation or ‘breaking things’ and then wanting to fix it.”
Robinhood responded and said: “Robinhood has made significant investments to improve the stability of the platform, improve educational resources and build support and legal and compliance teams for our client. We are pleased to leave this issue behind and continue to focus on our clients and finance for all we hope to democratize. “
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