Firm to pay $45 million in penalties

The violations by Robinhood related to failures to report suspicious trading in a timely manner, failing to implement adequate identity theft protections, and failing to adequately address unauthorized access to Robinhood computer systems, the SEC said.

Robinhood also had longstanding failures to maintain and preserve electronic communications, failed to retain copies of operational databases, and failed to maintain some customer communications as legally required between 2020 and 2021, according to the agency.

“It is essential to the Commission’s broader efforts to protect
investors and promote the integrity and fairness of our markets that broker-dealers satisfy their legal obligations when carrying out their various market functions,” said Sanjay Wadhwa, the acting director of the SEC’s Division of Enforcement, in a statement.

“Today’s order finds that 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, submit timely suspicious activity reports, maintain books and records, and safeguard customer information,” Wadhwa said.

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