Brokerage platform Robinhood has agreed to pay £45 million in penalties to the US Securities and Exchange Commission (SEC) to settle a range of charges related to regulatory violations, it was revealed Monday.
Robinhood to Pay SEC £45m in Penalties
The SEC order found that Robinhood failed to comply with a broad spectrum of regulations.
These are said to include delays in investigating and reporting suspicious transactions, inadequate measures to safeguard customer data from identity theft, and failing to adequately address a cybersecurity breach that compromised user data.
“Today’s order finds that two Robinhood firms failed to observe a broad array of significant regulatory requirements, including failing to accurately report trading activity, comply with short sale rules, submit timely suspicious activity reports, maintain books and records, and safeguard customer information,” commented Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement.
The order also cited inadequate record-keeping of electronic communications, failure to maintain key operational data for the legally required timeframe, and failure to maintain records of some customer communications.
Furthermore, Robinhood Securities reportedly violated rules related to inaccurate reporting of securities trading information to the SEC and non-compliance with regulations designed to prevent abusive short-selling practices.
The SEC order also censured both broker-dealers, Robinhood Securities LLC and Robinhood Financial LLC (collectively, Robinhood).
“It is essential to the Commission’s broader efforts to protect investors and promote the integrity and fairness of our markets that broker-dealers satisfy their legal obligations when carrying out their various market functions,” added Wadhwa.
