Robinhood Stock Down 7% After SEC Wells Notice, Plans Lawsuit Over Crypto

May 6, 2024, 12:41 PM

Robinhood's stock experienced a significant drop after the company disclosed receiving a Wells Notice from the U.S. Securities and Exchange Commission (SEC), as detailed in a Form 8-K filing. Issued on May 4, the notice signals the SEC's preliminary determination to recommend enforcement action and its intent to file a lawsuit against Robinhood's cryptocurrency business. The alleged violations pertain to Sections 15(a) and 17A of the Securities Exchange Act, leading to a stock price decrease of up to 7% in pre-market trading.