Robinhood also failed to “reasonably supervise and retain” social media communications by promoting posts from paid social media influencers, FINRA added.“Some of these communications included statements that were promissory or not fair and balanced, and thus misleading to investors.”Excerpt from FINRA’s investigation into Robinhood.Source: FINRAThe $3.75 million in restitution resulted from Robinhood Financial providing customers inaccurate or incomplete disclosures through “collaring” market orders by converting them to limit orders. Both Robinhood Financial and Robinhood Securities consented to the entry of FINRA’s findings without admitting or denying the charges. Related: DeFi’s Missing Link: Fixed Income (feat.
FINRA found that Robinhood Financial failed to reasonably supervise its clearing system despite there being noticeable processing delays due to increased demand between March 2020 and January 2021, which coincides with when Robinhood restricted trading in so-called meme stocks such as GameStop (GME) and AMC Entertainment Holdings (AMC).
Robinhood Financial and Robinhood Securities “admitted to certain findings” in that investigation, which accused them of failing to maintain and preserve electronic communications from customers between 2020 and 2021, among other things.
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Author / Journalist: Cointelegraph by Brayden Lindrea
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