Stock Trading App Robinhood has been fined $70 million by the Financial Industry Regulatory Authority or FINRA. The company has also been ordered by FINRA to pay $12.6 Million in restitution, plus interest, to its affected customers.
According to Businesswire, the multimillion-dollar fine is due to Robinhood's "systematic supervisory failures and significant harm suffered by millions of customers."
FINRA reportedly considered the significant harm suffered by Robinhood's customers, including those who received false and misleading information and those affected by the system outages last year, in determining the sanctions that will be imposed on the firm.
Robinhood will likewise have to pay back its customers more than $7 million that they lost due to the firm's spreading of false and misleading information among its clients, according to Forbes. Robinhood's false and misleading information included in a false negative cash balance that resulted to the suicide of a college student.
Stock Trading App Robinhood: What Went Wrong
Robinhood is a stock trading app owned by California-based financial services company Robinhood Markets, Inc. The company was founded in 2013. The app was officially launched in 2015.
Robinhood offers commission-free trading on its platform. Its products also include cash management and Robinhood Crypto, which lets customers "tap into the bitcoin market," according to the company website.
Among the cryptocurrencies customers can buy, HODL, or sell are Bitcoin, Ethereum, and Dogecoin.
This article is owned by Tech Times
Written by Isabella James
