The American brokerage platform Robinhood, very popular among thirties and internet users, was fined nearly $ 70 million on Wednesday by a financial regulator for causing harm to its clients.
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The financial penalty from the Financial Industry Regulatory Authority (FINRA), an organization under the authority of the US Stock Exchange Constable, includes a fine of $ 57 million and $ 12.6 million in damages (plus interest payments) to clients affected.
“The sanctions represent the biggest penalty ever imposed by FINRA and reflect the extent and seriousness of the violations,” Jessica Hopper, executive vice president of the organization responsible for enforcing the sanctions, said in a statement.
FINRA accuses Robinhood of causing harm to “millions of customers who received false or misleading information from the company and millions of customers who suffered systemic outages in March 2020”.
The organization specifically mentions the tragic case of Alexander Kearns, a young Robinhood client who died in June 2020 after discovering that his Robinhood brokerage account had a negative balance of more than $ 730,000.
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The unclear interface of the application could have made the young man believe that he was seriously in debt when his account was in fact in credit, notes FINRA.
The regulator also points to the fact that thousands of users were authorized to trade options on the platform when they did not meet the criteria to access these complex financial products.
Robinhood, who has not pleaded guilty to the FINRA accusations, claims to have made large investments to improve its platform, in particular by hiring thousands of managers for its customer service and by strengthening its educational resources.
“We are happy that this dispute is behind us and we look forward to continuing to devote ourselves to our clients and to the democratization of finance for all,” Jacqueline Ortiz Ramsay, head of communications for the AFP, told AFP. business.
Robinhood was founded in 2013 on the promise to make the stock market accessible to as many people as possible by eliminating commissions on each purchase and sale of stocks, index funds (ETFs) or options.
The platform found itself under fire from US lawmakers and regulators at the start of the year when it limited purchase orders for several stocks valued by many small carriers, including that of video game retailer GameStop.
She plans to make her debut on Wall Street by the end of the year.
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