U.S. regulators are investigating Robinhood after it temporarily blocked drug user from purchasing so - called meme stocks on its stock trading app amid the Reddit - fire myopic wring earlier this year .
Last month , retail investor from the universal gas constant / WallStreetBets assembly and elsewhere online buy up stocks for beleaguered company like GameStop , AMC , and Nokia to commit the price soaring and screw over hedging funds that depend on their prices to tank . At the tallness of this purchasing delirium , Robinhood temporarily prevented users from buy meme stocks , a move it claims was n’t aimed at drug user but rather resulted fromsurging clearinghouse collateral requirements .
commonwealth regulator and FINRA are also investigating Robinhood for an outage the app experienced in March 2020 as the market react to widespread lockdowns amid the coronavirus pandemic . Robinhood ’s options trading approval process and related customer communications and displays are being scrutinise as part of this investigation as well . In this week ’s filing , Robinhood allege its units , Robinhood Securities and Robinhood Financial , are negociate a colonization with FINRA that could potentially cost the broker at least $ 26.6 million .
Photo: Olivier Douliery (Getty Images)
As part of yet another investigating , the SEC , the New York General ’s Office , and other regulators are looking into incident of unauthorized coup of Robinhood customer account , the companionship said .
So TL;DR : Looks like Robinhood is go to be knee - deep in sound proceedings for a while . catch some popcorn , folk , this dramatic play is far from over .
Financial marketsGameStopNokiaR / wallstreetbetsRobinhoodShort selling
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