Robinhood
Summary List Placement
- Robinhood is under investigation by the Securities and Exchange Commission over its deals with high-speed trading firms, The Wall Street Journal reported on Wednesday.
- The probe is focused on Robinhood’s failure to fully disclose its practice of selling customers’ orders to market-makers, sources told The Journal.
- A settlement fine could exceed $10 million, but a deal is unlikely to be announced this month.
- Visit the Business Insider homepage for more stories.
The Securities and Exchange Commission is investigating Robinhood over its deals with high-speed trading businesses, The Wall Street Journal reported Wednesday afternoon.
The probe is in advanced stages and focuses on Robinhood’s failure to fully disclose its act of selling customers’ orders to market-makers, sources familiar with the matter told The Journal. The brokerage could be forced to pay a fine of more than $10 million if it settles with the SEC.
A fine hasn’t yet been negotiated between the two sides, one source said. A deal is unlikely to be announced this month, according to The Journal.
“We strive to maintain constructive relationships with our regulators and to cooperate fully with them,” a Robinhood spokesperson told Business Insider.
The report comes just two days after Bloomberg reported that both the SEC and the Financial Industry Regulatory Authority are investigating Robinhood and its handling of a day-long service outage in early March. The regulatory bodies are particularly interested in Robinhood’s lack of client response during the outage.
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