Robinhood to pay record $70M to settle range of allegations

The financial penalty is the largest ever ordered by the US Financial Industry Regulatory Authority, a nongovernmental organisation that oversees the brokerage industry.

Robinhood Financial will pay nearly $70m to settle a wide range of allegations, including that it gave customers misleading information and improperly allowed some users to make riskier trades after they lied about their trading experience. The financial penalty is the largest ever ordered by the Financial Industry Regulatory Authority (FINRA), a nongovernmental organisation that oversees the United States brokerage industry, and one that “reflects the scope and seriousness of Robinhood’s violations”, said Jessica Hopper, head of FINRA’s department of enforcement. Since its 2014 launch, Robinhood has shaken up the brokerage industry with zero-commission trading and an easy-to-use app that’s drawn a new generation of investors into the market.