ROBINHOOD Markets, the online trading platform, agreed to pay US$29.75 million to resolve several Financial Industry Regulatory Authority (Finra) probes into its supervision and compliance practices, including failure to respond to “red flags” of potential misconduct.
The brokerage regulator said on Friday (Mar 7) that Robinhood will pay a US$26 million civil fine and US$3.75 million of restitution to customers.
Finra accused Robinhood of violating “numerous” rules, including a failure to implement reasonable anti-money laundering programmes that caused it to miss suspicious or unauthorised trading and hackings of customer accounts.
It also said Robinhood failed to properly supervise social media influencers who promoted the company, or respond to several warnings of delays in processing trades.
Finra said the latter turned into a “severe” problem in January 2021. Late that month, Robinhood restricted trading in “meme” stocks such as GameStop and AMC Entertainment Holdings.
Restitution will go to customers who were not informed about Robinhood’s practice of “collaring” market orders, which led to some trades being cancelled and reentered at inferior prices.
Source: Robinhood paying US$29.75 million to end US regulator’s probes – The Business Times
Considering the billions in retail trades they stopped, which allowed institutional short sellers to save their arses, this tiny slap on the fingertips is an absolute farce
Robin Edgar
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