Robinhood preparing to pay fine of more than $26M to settle prior probes

Stock trading app Robinhood is in discussions with The Financial Industry Regulatory Authority (FINRA) to settle probes into options-trading practices and outages that took place in March of 2020, according to a recent regulatory filing. Robinhood is preparing to pay at least a $26.6M fine.

Why should we care?
News of the settlement talks come as Robinhood faces enhanced scrutiny for trading restrictions it imposed on GameStop and other so-called meme stocks. Late last week, the brokerage firm confirmed that regulators – including the Securities and Exchange Commission and FINRA – were investigating the temporary trading curbs it put in place amid a surge of activity. Prior to the recent GameStop controversy, Robinhood’s options trading practices came under fire amid the suicide of a 20-year-old trader who wrongly believed he had lost nearly $750,000. Despite these hurdles, the firm is reportedly preparing to confidentially file for an IPO as soon as this month, at a reported valuation of $20B. Robinhood has more than 13 million users with a median age of 31.