US broker Robinhood has received a $45m fine from the Securities and Exchange Commission (SEC) in the US.
The SEC said that the brokerage group breached more than 10 different regulations over the course of several years.
Some of these were fairly mundane, such as not keeping records for the requisite period of time.
Others were more serious. For example, in 2021 the broker had a cybersecurity vulnerability in its systems, which it knew was there, open for several months.
In November of that year, what the SEC describes only as a ‘third party’ was able to use that breach to access the broker’s systems and download the information of millions of clients.
Some of the other violations to securities laws were related to short selling rules, insider trading, and the broker’s fractional shares offering.
“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, Acting Director of the SEC’s Division of Enforcement.
“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.”
