California’s Department of Financial Protection and Innovation (DFPI) will pay fines of approximately $10.2 million for registering operational deficiencies that negatively impacted investors during the COVID-19 crisis. Participated in a multistate settlement of
A cryptocurrency company was fined an additional $30 million by the New York State Department of Financial Services (NYDFS) last summer for violating anti-money laundering and cybersecurity laws.
More trouble for Robin Hood
DFPI has become the newest state regulator. joining Multi-million contracts with Robinhood. Earlier, watchdogs in Alabama, Colorado, New Jersey, Delaware, Texas and South Dakota allege the company hurt some investors by ignoring several policies in March 2020. .
According to the regulator, it failed to inform users of the risks associated with multi-leg option spreads, did not design a client identification program, and did not conduct due diligence before approving specific options accounts. Nor did it cooperate with the Financial Industry Regulatory Authority (FINRA) or other relevant bodies.
The operational setback allegedly occurred in March 2020 (at the beginning of the devastating COVID-19 pandemic), when hundreds of thousands of investors relied on Robinhood’s platform.
NASAA President Andrew Hartnett praised the state regulators’ mutual efforts aimed at benefiting affected investors.
“Robinhood has repeatedly failed to serve clients, but this settlement makes it clear that Robinhood takes its customer care obligations seriously and must rectify these deficiencies,” he added. rice field.
DFPI Commissioner Clothilde Hewlett said such platforms “must adhere to common sense protections for investors and consumers as required by law.”
Despite the fine, California regulators found no evidence of any wrongdoing committed by Robinhood. The company also fully cooperated with the investigation.
The New York State Department of Financial Services (NYDFS) will fine Robinhood Crypto, the cryptocurrency-focused division of an online brokerage firm, $30 million in August 2022 after discovering a “major failure” in its compliance program. forced to pay
The agency alleged that Robinhood violated anti-money laundering requirements and did not properly upgrade its transaction monitoring system.
“DFS will continue to investigate and take action when licensees violate laws or agency regulations that are important to protecting consumers and ensuring the safety and integrity of our institutions,” said Adrienne A. Harris. the superintendent said at the time.
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