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Two Robinhood broker-dealers accepted pay $45 million in incorporated charges to resolve administrative charges by the Securities and Exchange Commission that they went against greater than 10 different safety and securities legislation stipulations connected to their broker agent procedures.
The offenses by Robinhood Securities LLC and Robinhood Financial LLC pertaining to failings to report dubious trading in a prompt way, falling short to apply appropriate identification burglary defenses, and falling short to effectively attend to unapproved accessibility to Robinhood computer system systems, the SEC stated Monday.
The 2 Robinhood entities additionally had historical failings to preserve and maintain digital interactions, fell short to preserve duplicates of functional data sources, and fell short to preserve some client interactions as lawfully called for in between 2020 and 2021, according to the firm.
The SEC stated that Robinhood Securities alone fell short for greater than 5 years “to provide complete and accurate securities trading information, known as blue sheet data” to the firm.
According to an SEC order revealed Monday, “During the [Electronic Blue Sheets] Relevant Period, in response to requests from the Commission, Robinhood Securities made at least 11,849 EBS submissions to the Commission that contained inaccurate information or omissions, resulting from eleven types of errors.”
“Those errors resulted in the misreporting of EBS data for at least 392 million transactions,” the order stated.
Robinhood Securities additionally fell short, from May 2019 via December 2023, to abide by Regulation SHO i n link with its supply loaning and fractional share trading program, the SEC stated. Regulation SHO was made to attend to violent short-selling methods.
Sanjay Wadhwa, the acting supervisor of the SEC’s Division of Enforcement, in a declaration, stated, “It is essential to the Commission’s broader efforts to protect investors and promote the integrity and fairness of our markets that broker-dealers satisfy their legal obligations when carrying out their various market functions.”
“Today’s order finds that two Robinhood firms failed to observe a broad array of significant regulatory requirements, including failing to accurately report trading activity, comply with short sale rules, submit timely suspicious activity reports, maintain books and records, and safeguard customer information,” Wadhwa stated.
Robinhood Markets General Counsel Lukas Moskowitz, in a declaration, stated, “We are pleased to resolve these matters. As the SEC’s order acknowledges, most of these are historical matters that our broker-dealers have previously addressed.”
“We are well-positioned to continue leading the industry in developing the innovative products and services our customers want and need to participate in U.S. and global financial markets,” Moskowitz stated. “We look forward to working with the SEC under a new administration.”
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