Trading platform Robinhood fined US$70M over outages, false information
Trading platform Robinhood has been fined some US$70 million in a case involving system outages and allegedly misleading information.
The penalty levied by the Financial Industry Regulatory Authority is the largest it has ever handed down. It topped up its initial fine of US$57 million by ordering a further US$13 million to be paid in restitution to millions of Robinhood’s clients.
In a statement, FINRA said it had “considered the widespread and significant harm suffered by customers, including millions of customers who received false or misleading information from [Robinhood], millions of customers affected by the firm’s systems outages in March 2020, and thousands of customers the firm approved to trade options even when it was not appropriate for the customers to do so.”
Robinhood shot into the global spotlight in January amid the GameStop saga, when it halted trading of the retailer’s stock during a historic rally that saw its shares soar more than 1,700% in a month in a frenzy emblematic of the investor hysteria surrounding memestocks and memecoins.
Robinhood has neither admitted to nor denied the accusations.
Lachlan is a journalist and producer at Forkast working from Melbourne, Australia. His work can be found in numerous magazines in Australia on topics ranging from culture to science. Lachlan holds a Bachelor’s degree in Journalism from Macleay College in Australia.