United States FINRA Fines Commission-Free Brokerage Robinhood $29.75 Million Including Restitutions for Misconduct, Executing Orders at Inferior Price, Delays in Processing Trades, Failure in Money Laundering, Failure to Reasonably Supervise Social Media Communications & Blue Sheets Reporting Obligations
8th March 2025 | Hong Kong
The United States FINRA (Financial Industry Regulatory Authority) has fined commission-free brokerage Robinhood $29.75 million including restitutions to customers for misconduct, executing orders at inferior price, delays in processing trades, failure in money laundering, failure to reasonably supervise social media communications & blue sheets reporting obligations. FINRA (7/3/25): “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. FINRA found, among other things, that: 1) Robinhood Financial provided customers with inaccurate or incomplete disclosures regarding its practice of “collaring” market orders by converting them to limit orders. Robinhood Financial has agreed to pay restitution of $3.75 million to certain customers whose market orders were collared and canceled, and who then re-entered their orders and received executions at an inferior price. 2) Robinhood Financial and Robinhood Securities failed to establish and implement reasonable anti-money laundering programs, which caused the firms to fail to detect, investigate or report suspicious activity, including manipulative trading, suspicious money movements and instances where customers’ accounts were taken over by third-party hackers. Robinhood Financial also failed to establish a reasonable customer identification program, which resulted in the firm opening thousands of accounts when it had not reasonably verified the customer’s identity. 3) Robinhood Securities failed to reasonably supervise its clearing technology system, which was used to clear trades for Robinhood Financial. The firm failed to reasonably respond to several red flags of processing delays due to increased demand on the system. Ultimately, the clearing system experienced severe latency in January 2021 due to a surge in trading volume and volatility, which, in turn, impacted Robinhood Securities’ clearing operations and its ability to satisfy certain regulatory obligations. 4) Robinhood Financial failed to reasonably supervise and retain social media communications promoting the firm that were posted by paid social media influencers. Some of these communications included statements that were promissory or not fair and balanced, and thus misleading to investors. 5) Robinhood Securities failed to comply with numerous aspects of the firm’s reporting obligations for blue sheets (securities trading information), FINRA trade reporting facilities and the Consolidated Audit Trail … … 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.” In 2025 February, the United States Securities & Exchange Commission (SEC) has closed crypto investigation on commission-free brokerage Robinhood Crypto. In 2024 May, the United States Securities & Exchange Commission (SEC) issued a warning of enforcement action to Robinhood for listing crypto tokens which are considered by SFC as securities. The United States SEC views crypto tokens as securities and are required to be registered. Earlier in 2025 February, the United States Securities & Exchange Commission (SEC) has been reported to be dropping charges against crypto platform Coinbase for illegal offering of securities and operating as unregistered securities exchange. In Asia, Robinhood is planning to launch crypto trading services in Singapore in 2025 2H via Europe digital-assets exchange Bitstamp (Acquired in 2024 June for $200 million). In 2025 January, the United States Securities and Exchange Commission (SEC) has fined commission-free brokerage Robinhood broker-dealers $45 million for multiple failures including failing to investigate & file suspicious transactions, adequately protect customers from identity theft, addressed cybersecurity vulnerability resulting in 3rd-party obtaining & downloading information of millions of individuals, maintained & preserved electronic communications, keeping brokerage data & maintaining customer communications, failed to provide electronic blue sheet data for 5 years, and failed to comply with stock lending & fractional share trading programs designed to address abusive short selling practices. In 2024 September, Robinhood will be paying $3.9 million settlement to United States California state for disallowing clients to withdraw cryptocurrency from 2018 to 2022. In 2024 May, the United States Securities & Exchange Commission (SEC) issued a warning of enforcement action to commission-free brokerage Robinhood for listing crypto tokens which are considered by SFC as securities. The United States SEC views crypto tokens as securities and are required to be registered. In 2022, FTX Founder Sam Bankman-Fried & CTO Gary Wang had borrowed $546 million from Alameda Research via Emergent Fidelity Technologies (EFT) to buy 8% of commission free brokerage Robinhood in May 2022, with Sam Bankman-Fried owning 90% of Emergent Fidelity Technologies and Gary Wang owning 10% of Emergent Fidelity Technologies. The transactions were detailed in an affidavit that surfaced during a dispute in the United Sates bankruptcy court (27/12/22). In August 2022, Robinhood announced 23% job cuts of 780 staffs (2/8/22), with Robinhood CEO Vlad Tenev acknowledging over-hiring having forecast the 2020 & 2021 market conditions would had last longer. In 2021, Robinhood IPO on NASDAQ at a market capitalisation of $32 billion ($38) with share price dropping 8% on day 1 (29/7/21: Closing $34.82, $29 billion market cap). The IPO also turned founders Stanford University roommates Vlad Tenev (Age 34, CEO & President) and Baiju Bhatt (Age 36, Chief Creative Officer & Director) into billionaires with $2.1 billion and $2.4 billion each. The IPO underwriters are Goldman Sachs and JP Morgan Chase, with 20% to 35% of shares allocated to Robinhood users, selling 52.4 million of shares and raising $2 billion in IPO proceeds. (IPO ~ Initial Public Offering)
“ United States FINRA Fines Commission-Free Brokerage Robinhood $29.75 Million Including Restitutions for Misconduct, Executing Orders at Inferior Price, Delays in Processing Trades, Failure in Money Laundering, Failure to Reasonably Supervise Social Media Communications & Blue Sheets Reporting Obligations “
United States SEC to Close Crypto Investigation on Commission-Free Brokerage Robinhood Crypto, United States SEC Issued Warning of Enforcement Action to Robinhood in 2024 for Listing Crypto Tokens Which are Considered by SFC as Securities, United States SEC Views Crypto Tokens as Securities & Required to be Registered
25th February 2025 – The United States Securities & Exchange Commission (SEC) has closed crypto investigation on commission-free brokerage Robinhood Crypto. In 2024 May, the United States Securities & Exchange Commission (SEC) issued a warning of enforcement action to Robinhood for listing crypto tokens which are considered by SFC as securities. The United States SEC views crypto tokens as securities and are required to be registered. Earlier in 2025 February, the United States Securities & Exchange Commission (SEC) has been reported to be dropping charges against crypto platform Coinbase for illegal offering of securities and operating as unregistered securities exchange. In Asia, Robinhood is planning to launch crypto trading services in Singapore in 2025 2H via Europe digital-assets exchange Bitstamp (Acquired in 2024 June for $200 million). In 2025 January, the United States Securities and Exchange Commission (SEC) has fined commission-free brokerage Robinhood broker-dealers $45 million for multiple failures including failing to investigate & file suspicious transactions, adequately protect customers from identity theft, addressed cybersecurity vulnerability resulting in 3rd-party obtaining & downloading information of millions of individuals, maintained & preserved electronic communications, keeping brokerage data & maintaining customer communications, failed to provide electronic blue sheet data for 5 years, and failed to comply with stock lending & fractional share trading programs designed to address abusive short selling practices. In 2024 September, Robinhood will be paying $3.9 million settlement to United States California state for disallowing clients to withdraw cryptocurrency from 2018 to 2022. In 2024 May, the United States Securities & Exchange Commission (SEC) issued a warning of enforcement action to commission-free brokerage Robinhood for listing crypto tokens which are considered by SFC as securities. The United States SEC views crypto tokens as securities and are required to be registered. In 2022, FTX Founder Sam Bankman-Fried & CTO Gary Wang had borrowed $546 million from Alameda Research via Emergent Fidelity Technologies (EFT) to buy 8% of commission free brokerage Robinhood in May 2022, with Sam Bankman-Fried owning 90% of Emergent Fidelity Technologies and Gary Wang owning 10% of Emergent Fidelity Technologies. The transactions were detailed in an affidavit that surfaced during a dispute in the United Sates bankruptcy court (27/12/22). In August 2022, Robinhood announced 23% job cuts of 780 staffs (2/8/22), with Robinhood CEO Vlad Tenev acknowledging over-hiring having forecast the 2020 & 2021 market conditions would had last longer. In 2021, Robinhood IPO on NASDAQ at a market capitalisation of $32 billion ($38) with share price dropping 8% on day 1 (29/7/21: Closing $34.82, $29 billion market cap). The IPO also turned founders Stanford University roommates Vlad Tenev (Age 34, CEO & President) and Baiju Bhatt (Age 36, Chief Creative Officer & Director) into billionaires with $2.1 billion and $2.4 billion each. The IPO underwriters are Goldman Sachs and JP Morgan Chase, with 20% to 35% of shares allocated to Robinhood users, selling 52.4 million of shares and raising $2 billion in IPO proceeds. (IPO ~ Initial Public Offering)
United States Commission-Free Brokerage Robinhood to Launch Crypto Trading Services in Singapore in 2025 2H via Europe Digital-Assets Exchange Bitstamp Acquired in 2024 June for $200 Million
20th February 2025 – United States commission-free brokerage Robinhood is planning to launch crypto trading services in Singapore in 2025 2H via Europe digital-assets exchange Bitstamp (Acquired in 2024 June for $200 million). In 2025 January, the United States Securities and Exchange Commission (SEC) has fined commission-free brokerage Robinhood broker-dealers $45 million for multiple failures including failing to investigate & file suspicious transactions, adequately protect customers from identity theft, addressed cybersecurity vulnerability resulting in 3rd-party obtaining & downloading information of millions of individuals, maintained & preserved electronic communications, keeping brokerage data & maintaining customer communications, failed to provide electronic blue sheet data for 5 years, and failed to comply with stock lending & fractional share trading programs designed to address abusive short selling practices. In 2024 September, Robinhood will be paying $3.9 million settlement to United States California state for disallowing clients to withdraw cryptocurrency from 2018 to 2022. In 2024 May, the United States Securities & Exchange Commission (SEC) issued a warning of enforcement action to commission-free brokerage Robinhood for listing crypto tokens which are considered by SFC as securities. The United States SEC views crypto tokens as securities and are required to be registered. In 2022, FTX Founder Sam Bankman-Fried & CTO Gary Wang had borrowed $546 million from Alameda Research via Emergent Fidelity Technologies (EFT) to buy 8% of commission free brokerage Robinhood in May 2022, with Sam Bankman-Fried owning 90% of Emergent Fidelity Technologies and Gary Wang owning 10% of Emergent Fidelity Technologies. The transactions were detailed in an affidavit that surfaced during a dispute in the United Sates bankruptcy court (27/12/22). In August 2022, Robinhood announced 23% job cuts of 780 staffs (2/8/22), with Robinhood CEO Vlad Tenev acknowledging over-hiring having forecast the 2020 & 2021 market conditions would had last longer. In 2021, Robinhood IPO on NASDAQ at a market capitalisation of $32 billion ($38) with share price dropping 8% on day 1 (29/7/21: Closing $34.82, $29 billion market cap). The IPO also turned founders Stanford University roommates Vlad Tenev (Age 34, CEO & President) and Baiju Bhatt (Age 36, Chief Creative Officer & Director) into billionaires with $2.1 billion and $2.4 billion each. The IPO underwriters are Goldman Sachs and JP Morgan Chase, with 20% to 35% of shares allocated to Robinhood users, selling 52.4 million of shares and raising $2 billion in IPO proceeds. (IPO ~ Initial Public Offering)
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