WASHINGTON: An industry regulator stated on Wednesday that online broker Robinhood Financial has been fined US$70 million for’systemic supervisory failures’ that damaged thousands of consumers. The company will pay a penalty of US$57 million and compensation of US$12.6 million to aggrieved customers. According to the Financial Industry Regulatory Authority (FINRA), the fine was the agency’s biggest ever. Consumers were deceived and exposed to excessively dangerous trading instruments, according to the regulator, and consumers were also let down when the firm’s services had several breakdowns.
“We are pleased to put this situation behind us and look forward to continuing to focus on our customers and democratising finance for all,” a firm spokeswoman said in an emailed statement, adding that the brokerage has made significant investments in customer resources, support, and compliance.
In December, Robinhood agreed to pay the Securities and Exchange Commission (SEC) US$65 million to settle claims that it misled clients about its revenue sources.
In recent months, authorities and lawmakers have increased their scrutiny of the internet company, which has been credited with popularizing trading among millennials, as retail investors have poured into so-called “meme stocks” such as GameStop Corp and AMC Entertainment Holdings./n
