Robinhood fined $57 million and ordered to pay $12.6 million restitution for systemic supervisory failures
Company: Robinhood Markets, Inc.
Summary
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