WSJ: Robinhood facing SEC investigation over dealings with high-frequency trading shops

advertisement

Popular millennial stock and options brokerage is said to be under civil fraud investigation into its failure to properly disclose how it routes client orders to high-frequency trading shops, according to The Wall Street Journal. 

Per the report, the investigation — conducted by the Securities and Exchange Commission — is in an "advanced stage" and could result in a $10 million fine. Robinhood makes a good portion of its revenues through a practice known as payment for order flow. Under a PFOF deal, a broker will sell off client order flow to high-speed traders like Citadel Securities, which internalizes and matches the orders. 

A deal could be announced this month and "the two sides haven't formally negotiated a proposed fine," according to the Journal.

Robinhood has previously been slapped with fines relating to its order routing practices. At the end of 2019, FINRA announced  a $1.25 million fine against Robinhood for improperly routing orders. 

Related Reading

Get Your Crypto
Daily Brief

Delivered daily, straight to your inbox.

Why BTG Pactual is launching a crypto platform

Brazil-based BTG Pactual, Latin America’s biggest investment bank, is launching its own crypto asset platform that will initially support bitcoin and ether trading. The platform will be called Mynt and allow customers to purchase bitcoin and ether, BTG Pactual’s Head of Digital Assets André Portilho tells The Block. Eventually, the platform will support other digital […]
Read Full Story
Sep 24, 2021, 9:17PM UTC

TRON USDC now available

Delivering on a vision for an interoperable global standard for dollar digital currency, Circle and TRON have partnered to make USD Coin (USDC) available on the TRON blockchain, which has grown to more than 56 million accounts and nearly 2.5 billion transactions since its founding just four years ago. TRON is home to a broad ecosystem for digital assets in Asia and around the world, and the TRON community can now benefit from easy access to the world's fastest-growing, regulated dollar digital currency. 
Read Full Story
Sponsored Post
More