WASHINGTON–(BUSINESS WIRE)–FINRA has ordered Robinhood Financial to pay $3.75 million to its customers, and fined Robinhood Financial and Robinhood Securities $26 million for violating numerous FINRA rules, including failing to respond to red flags of potential misconduct.
“In recent years, the brokerage industry has continued to evolve and develop innovative services and technologies that have allowed millions of new investors to access the markets,” said Bill St. Louis, Executive Vice President and Head of Enforcement at FINRA. “Today’s action reminds FINRA members that compliance with core regulatory obligations remains critical to safeguarding and serving all investors.”
FINRA found, among other things, that:
FINRA found that in each of these areas, and other areas described in the letter of acceptance, waiver and consent (AWC), Robinhood Financial and Robinhood Securities failed to establish a reasonable supervisory system to comply with FINRA rule obligations, including in some areas failing to reasonably respond to red flags of potential misconduct. Some of the areas addressed in the AWC were self-reported by the firms.
In settling these matters, Robinhood Financial and Robinhood Securities consented to the entry of FINRA’s findings, without admitting or denying the charges. The firms also agreed to certify that they remediated the issues identified in the AWC.
FINRA makes available disciplinary actions and other information on its Disciplinary Actions Online database. In addition, FINRA publishes on its Monthly Disciplinary Actions page a summary of disciplinary actions against firms and individuals for violations of FINRA rules; federal securities laws, rules and regulations; and the rules of the Municipal Securities Rulemaking Board. FINRA’s use of fine monies is limited to specific purposes set forth in its public Financial Guiding Principles, which are approved by its Board of Governors. FINRA publicly itemizes and discloses how it uses fine monies each year.
About FINRA
FINRA is a not-for-profit organization dedicated to investor protection and market integrity. FINRA regulates one critical part of the securities industry—member brokerage firms doing business in the U.S. FINRA, overseen by the SEC, writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and brokerage firms and their registered employees. For more information, visit www.finra.org.
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