Robinhood Faces Hundreds of Billions in Fines for 'Stock Trading Restrictions' "Record High Amount"

[Asia Economy Reporter Yujin Cho] Robinhood, which sparked outrage among investors due to trading restrictions and providing false information, has been fined a large sum.

On the 30th (local time), according to The Wall Street Journal (WSJ) and CNBC, the U.S. Financial Industry Regulatory Authority (FINRA) ordered the U.S. online securities trading app Robinhood to pay a fine of $57 million (approximately 64.3 billion KRW) and compensation of $13 million to affected customers.

The charges relate to causing harm to customers earlier this year by restricting trading of certain highly volatile stocks and providing false information. The combined fines and compensation amount to about $70 million, which foreign media reported is the highest fine ever imposed by FINRA.

In a statement, FINRA noted, "Millions of customers who were misled or provided with false information by Robinhood, millions affected by the system outage in March last year, and thousands of customers who were approved for options trading despite being ineligible suffered extensive and serious damages."

According to FINRA, Robinhood opened new accounts for 90,000 customers suspected of identity theft or fraud involvement between 2016 and 2018, and allowed options trading accounts for thousands of customers who did not meet the criteria.

Robinhood neither admitted nor denied the allegations but agreed to pay the fines and compensation. Robinhood stated, "We have invested in improving platform stability and educational resources, and in building customer support and legal teams," adding, "We will continue to focus on financial democratization for our customers and everyone through this incident."

Bloomberg reported that this sanction could also impact Robinhood's planned initial public offering (IPO). Robinhood's IPO schedule, aiming for a Nasdaq listing in June, is currently indefinitely postponed. Earlier, the news agency reported that the U.S. Securities and Exchange Commission (SEC) delayed reviewing Robinhood's cryptocurrency trading documents, potentially pushing the listing to around autumn.