fbpx

AIBC

Robinhood faces penalty of $70m

Posted:Jul 01, 2021 08:04 Category: Crypto , Regulatory , Posted by
Stanley Yin

Constant technical malfunctions and misleading information on client finances led to the highest fine ever issued by FINRA

The Financial Industry Regulatory Authority has issued its highest ever fine of $70 million for Robinhood, after the service provider gave misleading information to clients facing serious financial decisions.

FINRA-1200x628The misleading input was caused by faulty displays of the cash in their account and missing updates on prices or risk assessment during volatile phases of finance. It allowed clients to trade risky derivatives when not appropriate and presented false information on the client’s ability to engage in margin trading.

These errors gained wide-spread attention last year, when a Robinhood user committed suicide for believing he was more than $700,000 in debt. Tragically, this number was merely the result of false display, as the individual had a balance of $16,000.

FINRA cited this case, issuing the financial exchange platform to pay $57 million in fines, and $12,6 million plus interest in restitution to their customers.

Robinhood as a company has stated to improve their standards and tripled its customer support staff since last year to 2,700 employees. This correlates with their highly rapid growth, which exploded during the beginning of the Covid-19 pandemic.

In addition to the fine, FINRA is also investigating the vibrant activities of dubious accounts on Robinhood, with more than 100 accounts likely using the identity of deceased individuals.

Next up: Malta Week

Don’t miss out on amazing networking opportunities and exclusive industry insights at Malta Week. Four leading shows will bring the best of the business back-to-back to a first-class meeting point. Malta Week will consist of SiGMAAIBCMed-Tech World and AGS, each presenting the top developments of their focal industries.

The cross-collaboration of each brand make Malta Week the number one destination for leading think-tanks of the gaming sector, emerging tech, digital health and digital marketing. The middle of the Mediterranean is the perfect place for multi-faceted business deals and face-to-face conversations with leading affiliates, policymakers and thought leaders.

Related Posts

Nasdaq’s crypto exchange launch on…

Institutionalisation is key to creating stability and longevity with investors. [caption id="attachment_152559" align="alignleft" width="201"] Tal Cohen, Executive Vice President and…

FSOC warn cryptos could pose…

“The rapid growth of digital asset activities, including stablecoins and lending and borrowing on digital assets trading platforms, is an…

Kim Kardashian pays SEC $1.26M…

Kardashian concealed a $250,000 payment she had received in exchange for promoting EthereumMax and its token-burning feature in a message…