WASHINGTON: Wall Street's industry regulator fined Robinhood Financial LLC $70 million on Wednesday for "systemic" failures, including systems outages, providing "false or misleading" information, and weak options trading controls, saying those factors combined harmed millions of the app's customers.
The Financial Industry Regulatory Authority (FINRA) fine is the latest hit to Robinhood's reputation. The broker, which has been credited with democratizing trading, is under scrutiny by federal and state policymakers following this year's meme-stock fiasco which raised questions over the California firm's business model, risk management and customer treatment.