{"id":288216,"date":"2021-06-30T20:26:16","date_gmt":"2021-06-30T17:26:16","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/robinhood-to-pay-record-fine-in-us-over-lapses-regulatory-body\/"},"modified":"2021-06-30T20:26:16","modified_gmt":"2021-06-30T17:26:16","slug":"robinhood-to-pay-record-fine-in-us-over-lapses-regulatory-body","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/robinhood-to-pay-record-fine-in-us-over-lapses-regulatory-body\/","title":{"rendered":"#Robinhood to pay record fine in US over lapses: regulatory body"},"content":{"rendered":"

“#Robinhood to pay record fine in US over lapses: regulatory body<\/strong>”<\/p>\n

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\"Robinhood
\n Robinhood agreed to pay $70 mn to settle charges over a number of lapses on the investment platform.
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Robinhood will pay a record $70 million in penalties to settle charges it harmed thousands of consumers through “false and misleading” communications and other lapses, a US regulatory organization announced Wednesday.<\/p>\n

Regulators took the fast-growing investment platform to task for falling short of its pledge to “demystify finance for all,” charging the company “negligently” misled consumers, regulatory body Finra said. <\/p>\n

Robinhood communicated “false and misleading” information to consumers on whether customers could place trades on margin and displayed wrong information about specific accounts, said Finra, a nonprofit organization that regulators US brokerage firms.<\/p>\n

In one notorious example, an Illinois college student committed suicide after reading that his account had a negative cash balance of $730,165, an inaccurate sum, said Finra, which alluded to the “tragic” case in its press release.<\/p>\n

Following rules to protect investors “is not optional and cannot be sacrificed for the sake of innovation or a willingness to ‘break things’ and fix them later,” said Jessica Hopper, head of Finra’s enforcement division.<\/p>\n

“The fine imposed in this matter, the highest ever levied by Finra, reflects the scope and seriousness of Robinhood’s violations.” <\/p>\n

Robinhood, which has filed preliminary papers with US securities regulators to go public, was also charged with weak due diligence in app<\/a>roving customers to place options trades. Robinhood’s reliance on bots resulted in approval for thousands of customers who did not meet requirements or had red flags, Finra said.<\/p>\n

Lapses in oversight also led to a series<\/a> of outages on the platform in March 2020, harming customers, said Finra.<\/p>\n

Robinhood\u2014which did not admit or deny Finra’s allegations\u2014said it has taken a number of steps to improve its service, such as hiring thousands of customer support staff and improving system redundancy to reduce outages.<\/p>\n

“We are glad to put this matter behind us and look forward to continuing to focus on our customers and democratizing finance for all,” a Robinhood spokeswoman said.\n <\/p>\n\n

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Robinhood accused of ‘gamification’ by Massachusetts regulator\n <\/p><\/div>\n

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\n \u00a9 2021 AFP<\/p>\n

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Citation<\/strong>:
\n Robinhood to pay record fine in US over lapses: regulatory body (2021, June 30)
\n retrieved 1 July 2021
\n from https:\/\/techxplore.com\/news<\/a>\/2021-06-robinhood-fine-lapses-regulatory-body.html<\/p>\n

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