Robinhood Trading App To Pay $70 Million Penalties For Causing Significant Harm To Consumers
Robinhood will pay roughly $70 million in penalties for its systemwide outages and misleading communication and trading practices.
The Financial Industry Regulatory Authority said it fined Robinhood $57 million and ordered the stock trading app to pay nearly $13 million in restitution to thousands of clients.
The settlement regards the technical failures Robinhood experienced in March of 2020, Robinhood’s lack of due diligence before approving customers to place options trades and purveying misleading information to customers about aspects like trading on margin.
Robinhood is expected to go public in the coming months with a valuation north of $30 billion.
The popular online brokerage also faced criticism over the death of a 20-year old trader who killed himself after believing he racked up huge losses on Robinhood. The suicide was mentioned in the FINRA press release in the statement.