Robinhood Markets, Inc.
Approved Evidence
Robinhood broker-dealers paid $45 million for more than 10 separate securities-law violations
The SEC announced in January 2025 that Robinhood Financial and Robinhood Securities agreed to pay $45 million in combined penalties to settle charges involving more than ten separate violations of federal securities laws. The SEC findings covered failures involving suspicious-activity reporting, identity-theft protection, cybersecurity, electronic blue-sheet submissions, Regulation SHO, brokerage recordkeeping, off-channel communications, retention of core operational databases, and preservation of customer communications. The order also addressed the November 2021 data-security incident and failures to adequately address known risks posed by remote-access vulnerabilities. Robinhood Financial and Robinhood Securities were censured, ordered to cease and desist, and required to undertake remediation. Primary sources: SEC administrative order: https://www.sec.gov/files/litigation/admin/2025/34-102170.pdf Robinhood 2025 Form 10-K: https://www.sec.gov/Archives/edgar/data/1783879/000178387926000029/hood-20251231.htm
Robinhood fined $57 million and ordered to pay $12.6 million restitution for systemic supervisory failures
FINRA imposed its largest-ever financial penalty at the time against Robinhood Financial in June 2021, fining the firm $57 million and ordering it to pay approximately $12.6 million in restitution, plus interest, to thousands of harmed customers. FINRA found that Robinhood communicated false or misleading information to millions of customers, experienced significant systems outages in March 2020 that affected millions of users, and approved thousands of customers for options trading even when it was inappropriate based on their investment experience or risk tolerance. The regulator also found systemic supervisory failures and inadequate controls around account approval, customer communications, technology and options trading. Robinhood accepted the sanctions, including censure, the $57 million fine, restitution, and retention of an independent consultant. Primary source: FINRA — Robinhood Financial LLC Letter of Acceptance, Waiver and Consent: https://www.finra.org/sites/default/files/2021-06/robinhood-financial-awc-063021.pdf
Robinhood paid $65 million over misleading payment-for-order-flow disclosures and execution failures
SEC found Robinhood Financial repeatedly misstated or omitted information about its receipt of payment for order flow and failed to satisfy its duty to seek the best reasonably available execution terms. The SEC said inferior execution prices deprived customers of $34.1 million even after considering commission savings. Robinhood agreed to pay $65 million to settle the charges. Source: https://www.sec.gov/newsroom/press-releases/2020-321