Scott Olson | Getty Images
The Securities and Exchange Commission on Monday said two related Robinhood broker-dealers agreed to pay $45 million in combined penalties to settle administrative charges that they violated more than 10 separate securities law provisions related to their brokerage operations.
The violations by Robinhood Securities LLC and Robinhood Financial LLC related to failures to report suspicious trading in a timely manner, failing to implement adequate identity theft protections, and failing to adequately address unauthorized access to Robinhood computer systems, the SEC said.
The two Robinhood entities also had longstanding failures to maintain and preserve electronic communications, failed to retain copies of operational databases, and failed to maintain some customer communications as legally required between 2020 and 2021, according to the agency.
The SEC said that Robinhood Securities alone failed for more than five years “to provide complete and accurate securities trading information, known as blue sheet data” to the agency.
“It is essential to the Commission’s broader efforts to protect
investors and promote the integrity and fairness of our markets that broker-dealers satisfy their legal obligations when carrying out their various market functions,” said Sanjay Wadhwa, the acting director of the SEC’s Division of Enforcement, in a statement.
“Today’s order finds that two Robinhood firms failed to observe a broad array of significant regulatory requirements, including failing to accurately report trading activity, comply with short sale rules, submit timely suspicious activity reports, maintain books and records, and safeguard customer information,” Wadhwa said.
CNBC has requested comment from Robinhood.
This is breaking news. Please refresh for updates.
