![]() Photographer: Gabby Jones/Bloomberg via Getty Images Gabby Jones/Bloomberg/Getty Images Even though the firm said this year that it has more than doubled its customer-service team, clients complain they're struggling to get quick help when their funds are disappearing. The logo for Robinhood is displayed on a laptop computer in an arranged photograph taken in the Brooklyn borough of New York, U.S., on Monday, Oct. We recognize the responsibility that comes with having helped millions of investors make their first investments, and we’re committed to continuing to evolve Robinhood as we grow to meet our customers’ needs.” said Dan Gallagher, Robinhood’s chief legal officer.īut the rapidly growing firm has faced criticism over other practices this year. “The settlement relates to historical practices that do not reflect Robinhood today. The company claims to have significantly improved its practices and said it has established relationships with additional market makers to ensure the best trades possible for its customers. Robinhood settled the case without an admission of guilt and said it has changed the practices cited in the complaint. “Brokerage firms cannot mislead customers about order execution quality.” “Robinhood provided misleading information to customers about the true costs of choosing to trade with the firm,” said Stephanie Avakian, director of the SEC’s enforcement division. About half of those new users were first-time investors. The firm added 3 million funded accounts between January and April alone, a 30% growth spurt, according to an earlier statement from the company. The regulators said the deception took place at a time when Robinhood’s trading app was growing rapidly in popularity. In aggregate, those fees deprived customers of $34.1 million, even after taking into account the savings from the commission-free trades. The SEC said that Robinhood benefited from completing trades at prices that were less than optimal for its clients. Specifically, the regulator said Robinhood did not disclose the “receipt of payments from trading firms for routing customer orders to them, and with failing to satisfy its duty to seek the best reasonably available terms to execute customer orders.” ![]() Free stock-trading app Robinhood has agreed to pay a $65 million fine to the Securities and Exchange Commission to settle charges that it engaged in deceptive practices that hurt its clients.
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