Robinhood Agrees to Pay $70M to Settle Regulatory Investigation

wsj.com

12 points·uncomputation··6 comments

FINRA settlement

Not with a government agency yet, lets see if the SEC backs off too

They can probably just ignore Massachusetts, I usually take the approach of finding individual states and irrelevant nations to be ignorable and just pull out the business. Add an unexplained note to the disclaimer “Service not available in MA”

It should be interesting to see how this affects their upcoming IPO as well.

Typically settling before market listings is seen as favorable by investors. Investors don't have insight into the gravity or magnitude of pending regulatory issues or their costs. Settlements can involve completely governance changes into a company or share structure, so by getting them out of the way, specifically with money, gives confidence to investors.

Doesn't mean "stock goes up", it just means more investors will provide liquidity than before. Pending litigation and regulatory issues can completely derail a liquidity event.

so who actually gets this 70M if and when they pay it?

I'll take it if nobody else wants it.

Its a kickback to FINRA so that they’ll fuck off, and it consolidates a variety of complaints as resolved, absolving Robinhood off all its perceived indiscretions

FINRA has said they’ll use some of the funds ($30mm) on educating investors, aka expect an extra paragraph on page 34 of the disclaimer PDF before checking “I’ve read and agreed”

Reply on news.ycombinator.com