Trading platform Robinhood fined $70mn for lack of supervision by FINRA

30 June, 2021

Financial Industry Regulatory Authority (FINRA) announced today that it has fined Robinhood Financial LLC $57 million and ordered the firm to pay approximately $12.6 million in restitution, plus interest, to thousands of harmed customers, according to a statement.

The sanctions represent the largest financial penalty ever ordered by FINRA and reflect the scope and seriousness of the violations.

“In determining the appropriate sanctions, FINRA considered the widespread and significant harm suffered by customers, including millions of customers who received false or misleading information from the firm, millions of customers affected by the firm’s systems outages in March 2020, and thousands of customers the firm approved to trade options even when it was not appropriate for the customers to do so,” the statement said.

“Compliance with these rules is not optional and cannot be sacrificed for the sake of innovation or a willingness to ‘break things’ and fix them later,” said Jessica Hopper, Executive Vice President and Head of FINRA’s Department of Enforcement.

In settling this matter, Robinhood neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

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