The Securities and Alternate Fee (SEC) stated Monday (Jan. 13) that two Robinhood broker-dealers have agreed to pay $45 million in mixed civil penalties to settle expenses that they failed to watch a “broad array” of regulatory necessities.
Robinhood Securities agreed to pay a $33.5 million penalty, whereas Robinhood Monetary agreed to pay a $11.5 million penalty, the SEC stated in a Monday press launch.
As well as, each corporations admitted sure findings within the order, agreed to be censured and agreed to conduct an inside audit regarding off-channel communications compliance, based on the discharge.
“It’s important to the Fee’s broader efforts to guard traders and promote the integrity and equity of our markets that broker-dealers fulfill their authorized obligations when finishing up their numerous market features,” Sanjay Wadhwa, appearing director of the SEC’s Division of Enforcement, stated within the launch.
The regulator’s order discovered that the 2 Robinhood companies “failed to watch a broad array of serious regulatory necessities,” Wadhwa stated.
Reached by PYMNTS, Robinhood supplied an emailed assertion saying the corporate is “happy to resolve these issues.”
“Because the SEC’s order acknowledges, most of those are historic issues that our broker-dealers have beforehand addressed,” Robinhood Markets Normal Counsel Lucas Moskowitz stated within the assertion. “We’re well-positioned to proceed main the business in creating the modern services and products our clients need and have to take part in U.S. and international monetary markets. We stay up for working with the SEC below a brand new administration.”
The SEC stated in its press launch that the violations by Robinhood associated to suspicious exercise reporting, identification theft safety, unauthorized entry to the corporate’s techniques, off-channel communications, retention of brokerage knowledge and retention of buyer communications.
As well as, Robinhood Securities dedicated violations associated to digital blue sheets and to fractional share buying and selling and inventory lending, the discharge stated.
When dates have been specified for these violations, most have been dedicated previous to 2023 and one resulted in December 2023, per the discharge.
In an earlier case, Robinhood agreed to pay $65 million in December 2020 to settle SEC claims that the corporate deceived clients about the way it makes cash and did not ship the promised finest execution of trades. Robinhood didn’t admit or deny the regulator’s findings.