Robinhood will pay $65 million to settle allegations against it as it failed to inform its customers about revenue sources.
The Securities and Exchange Commission charged Robinhood Financial LLC as it failed to disclose the firm’s receipt of payments from trading firms for routing customer orders to them, and with failing to satisfy its duty to seek the best reasonably available terms to execute customer orders.
According to Joseph Sansone, Chief of the SEC Enforcement Division’s Market Abuse Unit, “Robinhood provided misleading information to customers about the true costs of choosing to trade with the firm.”
“Brokerage firms cannot mislead customers about order execution quality.”
Also, Joseph Sansone, Chief of the SEC Enforcement Division’s Market Abuse Unit said, “Robinhood failed to seek to obtain the best reasonably available terms when executing customers’ orders, causing customers to lose tens of millions of dollars.”
“Today’s action sends a clear message that the Commission will not allow brokers to ignore their obligations to customers.”
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