Two broker-dealers of Robinhood Markets Inc. have agreed to pay $45 million to resolve securities charges brought by the US SEC.
Robinhood Markets Inc., an American commission-free trading platform, was charged by the US Securities and Exchange Commission (SEC) with violating Federal securities provisions. The markets regulator specifically charged two of the exchange’s affiliated broker-dealers.
The Settlement Between Robinhood and the United States Securities and Exchange Commission
The Robinhood entities were found to have violated up to ten securities provisions, according to the US SEC publication that announced the accusations. These entities have consented to resolve the allegations, as well, according to the markets regulator. As stipulated in the agreement, the exchange will provide $45 million.
According to the US Securities and Exchange Commission (SEC), Robinhood Securities LLC and Robinhood Financial LLC did not promptly report suspicious trading. In addition, the regulator accused the broker-dealers of neglecting to implement sufficient measures to prevent identity theft.
The allegations were further exacerbated by the failure of both entities to address suspicious access to their computer systems. The approach to resolving short-selling practices and database management failures is the basis for additional charges.
Sanjay Wadhwa, the acting director of the SEC’s Division of Enforcement, emphasized the importance of broker-dealers fulfilling their legal obligations when performing their various market functions to protect investors and promote the integrity and fairness of our markets.
Gensler, on the other hand, has only seven additional days in office. This action may be the final one that he supervises. The commission is anticipated to undergo significant adjustments due to Donald Trump’s nomination of Paul Atkins as the next Chairman.
Is Robinhood Crypto exempt from liability?
The US SEC, which Gary Gensler heads, filed a Wells Notice against Robinhood Crypto in 2024. Robinhood Crypto is the digital assets subsidiary of the brokerage firm. The regulator stated in the Wells Notice that Robinhood Crypto may have violated securities laws with its crypto listings.
The regulator has not filed an official lawsuit against the brokerage since then, and the presidential inauguration is only a few days away.
The platform has maintained its involvement in cryptocurrency since the Wells Notice was received. The exchange has continued to operate, reportedly developing a stablecoin and increasing its support for digital currencies. The prospective impact of Atkins’s nomination on the market was even addressed by the company’s CEO, Vlad Tenev, in December.
The cessation of cryptocurrency crackdowns?
It is anticipated that the stringent enforcement action against crypto participants will cease upon the inauguration of President Donald Trump. In addition to Coinbase’s partial victory against the SEC, analysts anticipate that the regulator will resolve most of its outstanding cases involving cryptocurrency firms.
The exact nature of the implementation is still uncertain. Nevertheless, the probability of this occurring is considered high due to the presence of the Crypto & AI Czar in the White House.
