Robinhood agrees to $45 million settlement with SEC

Online brokerage platform Robinhood has reportedly agreed to pay a $45 million fine and reach a settlement with the U.S. Securities and Exchange Commission (SEC).
On the 13th, the SEC announced that Robinhood Securities and Robinhood Financial had violated more than 10 securities laws and that Robinhood would have to pay $45 million to settle the matter.
The sanctions affect Robinhood's two broker-dealer entities, Robinhood Securities and Robinhood Financial.
"We found widespread non-compliance by two Robinhood companies with key regulatory requirements," the SEC said in a statement, "including inaccurate reporting of trading activity, failure to comply with short-selling regulations, and questionable practices."
"These include late filing of Standardized Activity Reports (SARs), failure to maintain accounting books and records, and inadequate measures to protect customer information."
According to the order published on the 13th, the two Robinhood subsidiaries have been trading on the stock exchange since 2020.
Robinhood also failed to maintain and preserve records of its customers' electronic communications during 2021.
It was found that the company provided inaccurate or missing information on more than 11,849 Electronic Blue Sheets records.
"These errors resulted in EBS data being misreported for more than 392 million transactions," the SEC said.
In addition, the company was indicted for failing to timely report suspicious activity from January 2020 to March 2022, for inadequate identity theft prevention measures from April 2019 to July 2022, and for failing to timely report suspicious activity from January 2020 to March 2022.
The SEC pointed out that the company did not comply with Regulation SHO, which regulates short selling practices from December 2019 to May 2022. In addition, the company also filed a lawsuit against the Cybersecurity and Financial Services Agency (SEC) in 2021.
The company also cited the company's failure to adequately address security vulnerabilities that led to unauthorized third parties gaining access to the personal information of millions of Robinhood customers.
Both companies agreed to plead guilty to some of the charges and receive warnings under the SEC's orders.
Robinhood Securities was fined $33.5 million, and Robinhood Financial was fined $11.5 million.
This amount must be paid by January 27th.