Financial regulator hits Robinhood for $70 million for "widespread and significant harm" to customers
By Michael Kaplan
Former Robinhood workers speak out
The stock-trading app Robinhood was ordered to pay nearly $70 million Tuesday by financial regulators for misleading its customers, causing them to lose millions of dollars.
A major player in the recent stock market frenzy, Robinhood says its mission is to stand up for the little guy and "democratize finance." But in a 123-page complaint, the Financial Industry Regulatory Authority said Robinhood inflicted "widespread and significant harm" to millions of customers by providing them with false information about their investments. FINRA, which has federal authority to regulate financial firms, said the company also failed to reasonably maintain its technology and neglected to do proper due diligence before approving customers for complex trades called options.