Robinhood: The $30 Billion Cockroach Of Fintech
Robinhood and it's so-called "democratization of finance." (Photo Illustration by Rafael ... [+] Henrique/SOPA Images/LightRocket via Getty Images)
On successive days last week, digital brokerage Robinhood: 1) was hit with a $70 million fine by FINRA for outages and misleading customers, and 2) announced it was going public.
Fining Robinhood has about as much impact on the company as spraying pesticides has on cockroaches (that is, it has no effect at all).
FINRA (the Financial Industry Regulatory Authority) charged Robinhood with “systemic supervisory failures and significant harm suffered by millions of customers." The brokerage is alleged to have:
The FINRA fine isn’t Robinhood’s only legal trouble. Since the GameStop debacle earlier this year, nearly 90 lawsuits have been filed against the brokerage.
The most high-profile case, Nelson v. Robinhood Financial, LLC, alleges breach of contract and breach of fiduciary duty for halting trading unfairly and causing massive losses for users.
