Robinhood has agreed to a $45M settlement to address the SEC's charges regarding alleged violations of US laws.
The Need for Strong Reporting Systems
The SEC claimed Robinhood failed to maintain customer interaction records between 2020 and 2021, submitting nearly 12,000 Electronic Blue Sheets with incomplete or wrong information, affecting data accuracy for over 392 million transactions.
Both Entities to Pay $45M in Fines
In response to the findings, Robinhood Securities has agreed to pay $33.5 million, and Robinhood Financial will pay $11.5 million. Both firms must clear these fines by January 27.
Allegations of Short Sale Rule Violations
The SEC noted Robinhood's failure to comply with regulatory requirements, including trading activity reports and short sale rules. A cybersecurity vulnerability in 2021 allowed unauthorized access to millions of customer records.
The SEC's decision highlights the necessity for regulatory compliance, data security, and accurate financial reporting.
