Robinhood pays fines of over $ 10 million to numerous US states because they have harmed investors

Robinhood pays fines of over $ 10 million to numerous US states because they have harmed investors

The California Ministry of Finance Protection and Innovation (DFPI) has joined a comparison between several countries and Robinhood, which will pay about $ 10.2 million in fines for the registration of company defects that affect investors during the COVID-19 crisis have.

The crypto-related company was documented last summer by the New York State Department of Financial Services (NYDFS) due to violation of laws to combat money laundering and cyber security with a further penalty of $ 30 million

More trouble for Robinhood

The DFPI was the latest state regulatory authority connect The millions with robinhood. Previously, the wax dogs of Alabama, Colorado, New Jersey, Delaware, Texas and South Dakota claimed that in March 2020 the company had caused damage to some of its investors by neglecting several guidelines.

According to the supervisory authorities, users did not inform users about the risk associated with multi-leg option spreads, do not develop a customer identification program and do not allow a proper care before the approval of certain option accounts. She also did not cooperate with the Financial Industry Regulatory Authority (Finra) and other relevant authorities.

The operational setbacks allegedly occurred in March 2020 (at the beginning of the devastating Covid 19 pandemic), as hundreds of thousands of investors on the platform of Robinhood.

NASAA President Andrew Hartnett praised the joint efforts of the state supervisory authorities who aim to benefit from affected investors.

"Robinhood has repeatedly failed to serve his customers, but this comparison makes it clear that Robinhood has to take its customer support obligations seriously and to remedy them," he added.

DFPI commissioner Clothilde Hewlett said that such platforms "must correspond to the legally required reasonable protective measures for investors and consumers".

Despite the fines, the California supervisory authority did not find any evidence of fraudulent activities of Robinhood. In addition, the company cooperated without restriction during the investigation.

The previous settlement

The New York State Department of Financial Services (NYDFS) forced Robinhood Crypto (the unit of the online broker company) geared to pay a punishment of $ 30 million in August 2022 after it found "significant errors" by the compliance program had.

The agency claimed that Robinhood had violated the requirements for combating money laundering and did not properly update its transaction monitoring system. In addition, it was followed by cyber security guidelines that did not match the standards defined by the NYDFS.

"DFS will continue to determine and take measures if a licensee violates the law or the provisions of the ministry, which are of crucial importance for consumer protection and the guarantee of the security and solidity of the institutions," said Superintendin Adrienne A. Harris at the time.

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