Founded in 2013 by Vlad Tenev and Baiku Bhatt, Robinhood Financial, LLC (“Robinhood”) is a broker-dealer headquartered in Lake Mary, Florida. The firm, which provides online and mobile application-based discount stock brokerage solutions, is a subsidiary of Robinhood Markets, Inc. As of March 2021, the firm had approximately $80B in assets under custody and 2,100 full-time employees. Robinhood’s brokers are licensed in all 50 states as well as the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
Financial Misconduct at Robinhood Financial, LLC
Robinhood is licensed by the Financial Industry Regulatory Authority (FINRA), and as such is legally obligated to ensure its brokers are acting lawfully in the interest of their investors. If a client suffers losses as a result of negligent behavior or misconduct from a broker, then the firm may be held legally responsible to repay the damages.
Robinhood and brokers backed by Robinhood have a long history of misconduct. Per FINRA’s BrokerCheck report, the firm has 9 disclosures.
In June, 2021 FINRA fined Robinhood the largest ever penalty: $57M and ordered the firm to pay nearly $13M in restitution plus interest to thousands of clients after it failed to perform due diligence and make sure it was appropriate prior to approving customers to place options trades and shared false or misleading information about the risks associated with certain options spread transactions.
The firm approved thousands of customers who did not satisfy the firm’s eligibility criteria or whose accounts contained red flags that options trading may not be appropriate for them. Robinhood lacked an adequate supervisory system.
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Meyer Wilson reclaimed $350 million for the victims of investment fraud or misconduct. Our attorneys are experienced in going up against the largest investment firms, such as Robinhood Financial, LLC, and our track record affirms our resources and expertise. Meyer Wilson has represented clients nationwide and internationally, in state and federal courts, and in securities arbitration. As an investor, you have a right to recover investments lost through unethical behavior or decisions made against your interests.
