Robinhood CEO Vlad Tenev says the company met with the SEC 16 times before facing regulatory action.
In a Wednesday interview with CNBC, the CEO disclosed that he and Robinhood CEO Vlad Tenev met with the United States Securities and Exchange Commission (SEC) sixteen times prior to the commission sending the cryptocurrency company a Wells Notice.
“We intended to meet with the SEC in good faith.” “I believe we met with them sixteen times, but that was not reciprocated,” Tenev told Kate Rooney of CNBC.
Robinhood Briefed the SEC 16 Times Before Wells’ Notice
Court documents indicate that on May 4, the federal regulator issued a Wells Notice. In that notice, the commission “preliminarily determined” to recommend that the SEC initiate enforcement proceedings against RHC because the company had violated Sections 15(a) and 17A of the Securities Exchange Act of 1934, as amended.
Although no specific enforcement measure was disclosed, the court filing on Saturday suggests that it might consist of a “public administrative proceeding, cease-and-desist proceeding, or civil injunctive action.”
Earnings for the first quarter of Robinhood surpass expectations
The announcement of Tenev’s status coincides with the disclosure of Robinhood’s initial quarter earnings projections, which indicated a substantial revenue of $329 million—exceeding expectations by more than $70 million from $255 million.
In the first quarter, we generated substantial revenue growth and expanded margins, and we remain committed to sustaining profitable growth in 2024,” said Jason Warnick, chief financial officer of Robinhood.
“We established quarterly revenue, net income, and EPS milestones in the first quarter despite increasing marketing and growth expenditures.
“During a conference call on Wednesday afternoon to discuss earnings, Tenev referred to the Wells Notice as a “disappointing development.”
The SEC has faced persistent criticism due to its rigorous approach to regulating digital advertisements and reliance on enforcement measures. Several significant participants in the cryptocurrency sector have been subject to legislative measures imposed by the federal agency.
Concerns have arisen regarding the SEC’s categorization of digital assets in light of the absence of a regulatory framework for cryptocurrencies.
“We are confident that the assets listed on our platform do not qualify as securities, and we eagerly await the SEC’s engagement to demonstrate in writing how legally and factually weak any case against Robinhood Crypto would be,” said Dan Gallagher, chief legal compliance officer of Robinhood. “
If Tenev’s assertions are confirmed, Robinhood’s meetings with the SEC could potentially indicate the company’s rejection of cryptocurrency firms attempting to adhere to federal regulation in the midst of a more extensive assault on the digital asset sector.