(WSJ) Online brokerage Robinhood Financial LLC has agreed to pay approximately $70 million to clean regulatory accusations over its trading practices and technology outages.
Robinhood is accused of misleading customers, approving disqualified traders for risky plans, and failing to monitor technologies that prevented people from trading.
The Financial Industry Regulatory Authority yesterday disclosed the settlement, with the online brokerage neither refusing nor accepted the claim.
Earlier this year, Robinhood infuriated customers by limiting trading in certain popular stocks.
While clients criticized the company’s service and technology holdups, Robinhood has continued to grow, its largest profit source stemming from consumers.
Robinhood has said it has taken steps to address the causes of technology outages, minimize potential risks, and has introduced new customer-service options.
The regulatory settlement includes a $57 million fine and $12.6 million in compensation to affected investors.
The $57 million penalty would be the biggest by Finra and eclipses the $50 levied on Credit Suisse in 2002.
