Robinhood Markets has agreed to pay a $45 million settlement to resolve charges from the U.S. Securities and Exchange Commission (SEC) concerning multiple securities law violations. The SEC’s investigation identified over ten infractions by Robinhood’s brokerage units, Robinhood Securities LLC and Robinhood Financial LLC. These violations include failures in recordkeeping, trade reporting, and the maintenance of accurate books and records.
SEC
The SEC’s findings revealed that Robinhood’s broker-dealers did not properly report trading activities, comply with short sale regulations, or submit timely suspicious activity reports. Additionally, the company failed to preserve electronic communications from customers between 2020 and 2021 and submitted inaccurate information in response to SEC requests, known as Electronic Blue Sheets, affecting at least 392 million transactions.
SEC
The settlement allocates $33.5 million to Robinhood Securities and $11.5 million to Robinhood Financial. Both entities have agreed to be censured and have committed to enhancing their compliance measures to prevent future violations. Robinhood’s General Counsel, Lucas Moskowitz, expressed satisfaction with resolving these matters and emphasized the company’s dedication to working collaboratively with the SEC under the new administration.
REUTERS
This settlement is part of a broader initiative by the SEC to enforce stricter compliance among financial institutions, particularly concerning the use of unauthorized messaging platforms and the safeguarding of customer information. The SEC’s actions underscore its commitment to ensuring transparency and integrity within the financial markets.
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