Tr?id=566623520170033&ev=PageView&noscript=1

Robinhood to Pay $45 Million for Multiple Securities Law Violations

Posted on January 29th, 2025 at 11:27 AM
Robinhood to Pay $45 Million for Multiple Securities Law Violations

From the desk of Jim Eccleston at Eccleston Law

Robinhood Securities LLC and Robinhood Financial LLC have agreed to pay $45 million to resolve allegations of widespread securities law violations. According to InvestmentNews, the settlement follows an SEC investigation that uncovered ten distinct regulatory failures spanning several years. Key violations include:

1. Suspicious Activity Reporting: Between January 2020 and March 2022, Robinhood failed to timely investigate suspicious transactions and file required suspicious activity reports.

2. Identity Theft Protection: From April 2019 to July 2022, Robinhood did not implement adequate policies to protect customers from identity theft risks.

3. Cybersecurity Lapses: Between June and November 2021, Robinhood failed to address known cybersecurity vulnerabilities related to remote access to its systems. This negligence allowed a third party to gain unauthorized access and download sensitive information on millions of individuals in November 2021.

4. Off-Channel Communications: Robinhood admitted to violating recordkeeping provisions of federal securities laws by failing to maintain and preserve electronic communications.

5. Brokerage Data Retention: The firms failed to secure copies of core operational databases, leaving records vulnerable to deletion or modification, contrary to legal requirements.

6. Customer Communications: Between 2020 and 2021, Robinhood failed to properly maintain some communications with its brokerage customers.

Additional violations, specific to Robinhood Securities, included issues with blue sheet data filings, fractional share trading, and stock lending.

Sanjay Wadhwa, acting director of the SEC’s Division of Enforcement, emphasized the significance of these violations. “Two Robinhood firms failed to observe a broad array of significant regulatory requirements, including failing to accurately report trading activity, comply with short sale rules, maintain books and records, and safeguard customer information,” Wadhwa said.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

Hiring Eccleston Law has been one of the best career decisions I have made and this "investment" to maintain my sterling regulatory record has been returned many times over.  If you are in a situation where you've been unfairly accused, don't hesitate to talk with Eccleston Law. They are the best.

Thomas C.

LATEST NEWS AND ARTICLES

1787947445 Law
August 28, 2026
SEC Accuses Goliath Ventures of $425 Million Crypto Investment Ponzi Scheme

The Securities and Exchange Commission (SEC) has filed a civil complaint against Goliath Ventures Inc.

1787852053 Law
August 27, 2026
United Capital Revives Lawsuit Against Osaic

According to AdvisorHub, United Capital Financial Advisors has revived its lawsuit against independent broker-dealer Osaic by filing an amended complaint that reframes the dispute around the alleged misuse of confidential information obtained during Osaic's unsuccessful effort to acquire the firm.

1787765850 Law
August 26, 2026
FINRA Orders WestPark Capital to Pay $520,000 Over GWG L Bond Sales

The fallout from the collapse of GWG Holdings continues to affect the broker-dealers that sold the company's illiquid L bonds.