COLUMBIA, L.O. (WOLO)– Thursday, Attorney General Alan Wilson said that South Carolina has entered a settlement with Robinhood Financial LLC. that includes other states.
Authorities in Alabama, Colorado, California, Delaware, New Jersey, South Dakota, and Texas looked into the case and came to a deal.
The North American Securities Administrators Association (NASA) is in charge of investigating Robinhood’s problems with functioning in the retail market.
A lot of investors were using the Robinhood app to make trades in March 2020, but the company’s platform went down. This led to the probe, which the Attorney General’s Office started.
As part of the settlement, up to $10.2 million will be paid in fines for technical and managerial mistakes that hurt investors.
Attorney General Wilson said, “Today’s agreement shows that state securities regulators are still working to protect investors and make sure that financial services firms treat them fairly.”
The following violations are part of South Carolina’s Consent Order settlement:
- Giving wrong information to customers without thinking, like about margin and the risk that comes with multi-leg option spreads.
- Not having a customer identification program that is reasonably planned.
- Failure to keep an eye on technology that is necessary to provide core broker-dealer services to customers.
- Not having a system in place that is reasonably built to handle customer questions.
- Not doing enough research before giving certain choice accounts the go-ahead.
- Not telling the Financial Industry Regulatory Authority (“FINRA”) and state securities officials about all customer complaints as needed.
The Attorney General’s Office said that Robinhood did not neither agree nor disagree with the results in the Consent Order.