Robinhood Securities and Financial to Pay $45 Million for Over 10 SEC Violations

Jan 13, 2025, 11:03 PM

Robinhood Markets Inc. has agreed to pay a $45 million penalty to settle charges brought by the U.S. Securities and Exchange Commission (SEC) against two of its broker-dealers, Robinhood Securities LLC and Robinhood Financial LLC. The SEC found that the firms violated more than 10 separate securities law provisions between 2018 and 2024. The violations included failures in timely reporting of suspicious trading activity, inadequate identity theft protections, and insufficient cybersecurity measures. Additionally, the firms failed to maintain and preserve electronic communications and operational databases, and did not comply with short sale rules. The SEC also noted that Robinhood Securities provided inaccurate trading data, known as blue sheet data, for over 392 million transactions. Robinhood's General Counsel, Lukas Moskowitz, stated that the company is pleased to resolve these matters and is committed to continuing to lead the industry in innovation while working with the SEC under a new administration.