Robinhood Will Pay $45M to SEC in Penalties

Robinhood Markets, an online trading company, has agreed to pay $45 million to settle charges by the US Securities and Exchange Commission for violating record keeping, trade reporting, and other regulations.

These violations include inaccurate reporting of trading activity, delayed reporting of suspicious activity, inadequate record keeping, and non-compliance with short sale rules. The SEC acting director, Sanjay Wadhwa, stated that Robinhood Securities LLC and Robinhood Financial LLC were found to have violated numerous requirements.

The company also joins a growing list of broker-dealers guilty of not retaining work-related communications, such as those shared through messaging apps and other “off-channel” platforms. Robinhood acknowledged these failures, as well as deficiencies in their trading data, commonly referred to as blue sheets.

Additionally, regulators found that Robinhood did not adequately address cybersecurity risks. Robinhood’s General Counsel, Lucas Moskowitz, expressed the company’s satisfaction in resolving these issues.

He also stated that they are confident in their ability to continue providing innovative products and services to their customers. Moskowitz further commented that the company looks forward to working with the SEC under a new administration.