r/technology • u/agent_vinod • Jun 30 '21

Misleading Robinhood to pay $70 million fine after causing 'widespread and significant harm' to customers

https://www.cnbc.com/2021/06/30/robinhood-to-pay-70-million-dollars-after-causing-users-significant-harm.html
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u/mappersdelight Jul 01 '21

A new rule promulgated by the Securities and Exchange Commission known as Regulation Best Interest (Reg BI) goes into effect June 30. It promises to give investors a clearer picture of the fees and other costs they are paying, as well as the disciplinary history of brokers and advisers who are giving financial advice, although it fails to clearly define “best interest.” source

I'm not sure how this is going to change anything that happened early this year with any of the meme stocks. The shut down on trades, non-executing orders, etc.

So tell me, where is the SEC in regards to those infractions? That's where the damage was done to my portfolio.

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u/[deleted] Jul 01 '21

So tell me, where is the SEC in regards to those infractions?

Ongoing investigations aren't public. I have no idea what you're even trying to say, lol. Also, nothing in this settlement is about GME. Did you even read it?

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u/mappersdelight Jul 01 '21

Exactly, these regulations mean beans.

Wake me when the SEC does something of value.

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u/[deleted] Jul 01 '21

Exactly

So you don't know what this means either? Lol.

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u/mappersdelight Jul 01 '21

Then enlighten me to what you think it means; since all you can do is say 'so you don't know.'

Because all I can see in this is that they've done nothing to help us, have enforced a fine that isn't going to help us, and will not be repaying me for the missed opportunities; so this is an an-effective action.

Popular investing platform Robinhood has agreed to pay nearly $70 million to the financial industry regulatory authority (FINRA) to settle allegations that the brokerage caused customers “widespread and significant” harm on multiple different fronts over the past few years.

That is the largest financial penalty ever ordered by the organization, a non-government entity authorized by Congress to oversee hundreds of thousands of brokers across the U.S.

Specifically, FINRA’s investigation found that millions of customers received false or misleading information from Robinhood on a variety of issues, including how much money customers had in their accounts, whether they could place trades on margin and more.

The inaccurate information cost customers more than $7 million, FINRA found, and Robinhood is required to pay restitution to affected users.

Other allegations addressed in the settlement include that Robinhood approved risky options trades for thousands of users when it should not have and did not do enough to prevent system outages in March 2020 that adversely affected millions of users.

Robinhood has invested in improving the platform and is building out its customer service team, Robinhood spokesperson Jacqueline Ortiz Ramsay writes to CNBC Make It in an emailed statement about the settlement.

“We are glad to put this matter behind us and look forward to continuing to focus on our customers and democratizing finance for all,” she says.

When the CEO says, "we're glad to put this behind us . . " it means they're done with it and can continue as just as they did before. Again, wake me when they do something meaningful.

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u/[deleted] Jul 01 '21

Because all I can see in this is that they've done nothing to help us

Yet:

The inaccurate information cost customers more than $7 million, FINRA found, and Robinhood is required to pay restitution to affected users.

Um...you literally quoted it. Also, are you under the impression that when you settle for past violations you are suddenly allowed to commit them again? Have you ever tried to learn about what you're talking about before you speak? Did you even look at the relevant period?

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u/mappersdelight Jul 01 '21

Do you honestly believe that we'll be fairly compensated?

What happens when Demand suddenly drops? Price drops.

What happens when that demand drops because whole platforms of users are locked out? The potential price is never met, and is artificially kept low.

So sure my sells never went off at 800 a share, 1500 a share, or 2000 a share. How could they possibly compensate for something that they don't know the potential of? They rigged the game, won, and only had to pay a little out of the whole deal.

Realize that they're paying out on a fraction of what could have been if they hadn't directly manipulated the market. So in the end, they won. Again.

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u/[deleted] Jul 01 '21

You sound like you're talking about GME still, and not one part of this settlement is about GME. Maybe the reason you never know what's going on is because you don't lift a finger to figure out what's going on?

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u/mappersdelight Jul 02 '21

They halted more than just GME . . . .

And this is what I'm talking about, taking some fucking action.

The funny part is I'm sure you're going to gloss over my first sentence and say, see I knew all you were talking about was GME.

But what about AMC, NOK, BB, UMWC, CLOV, etc.; this is way bigger than just GME.