The United States Securities and Exchange Commission (SEC) last Monday, January 13, reported that two broker-dealers of Robinhood, a financial services company, agreed to pay $45 billion in combined civil penalties to settle charges that they did not comply with a broad array of regulatory requirements.
Robinhood Securities has agreed to pay a $33.5 million penalty. Robinhood Financial agreed to pay a $11.5 million penalty. The relevant information is contained in the SEC’s press release, which was published Monday.
Moreover, both the mentioned companies admitted certain findings in the order. The firms agreed to be censured and to conduct an internal audit concerning compliance in the area of off-channel communications. This information is contained in the SEC’s press release.
Sanjay Wadhwa, acting director of the SEC’s Division of Enforcement, stated that it is essential to the Commission’s broader efforts to protect investors and promote the integrity and fairness of markets that broker-dealers satisfy their legal obligations when carrying out their various market functions. It was also noted that the regulator’s order found that the two Robinhood firms failed to observe a broad array of significant regulatory requirements.
Robinhood stated in a media comment that the company is pleased to resolve the mentioned matters.
Robinhood Markets General Counsel Lucas Moskowitz noted that the SEC’s order acknowledges that most of the specified matters are historical and were previously addressed by broker-dealers of the firm.
The regulator’s press release clarified that the violations by the company relate to reports of suspicious activity, protection against identity theft, unauthorized access to the brand’s systems, off-channel communications, and the retention of brokerage data and customer messages.
As we have reported earlier, Robinhood Launches Desktop Platform.
