Robinhood has been ordered to pay $70 million in penalties over their outages, as well as misleading communication and dodgy trading practices.
The Financial Industry Regulatory Authority (FINRA) is a self-regulatory organization that oversees brokerage firms and their registered representatives -- slapped Robinhood with a $70 million fine. This is split between a $57 million fine and $13 million in restitution to thousands of customers.
FIRNA explained: "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".
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Jessica Hopper, executive vice president and head of FINRA's Department of Enforcement added: "The fine imposed in this matter, the highest ever levied by FINRA, reflects the scope and seriousness of Robinhood's violations, including FINRA's finding that Robinhood communicated false and misleading information to millions of its customers".
What does Robinhood have to say for itself at this particular time?
Robinhood head of public policy communications Jacqueline Ortiz Ramsay responded to the news of the $70 million fine, where she said: "Robinhood has invested heavily in improving platform stability, enhancing our educational resources, and building out our customer support and legal and compliance teams. We are glad to put this matter behind us and look forward to continuing to focus on our customers and democratizing finance for all".
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