Robinhood settles with Vermont for $640,000 over outages

InvestmentNews

Robinhood Markets Inc. reached a $640,000 settlement with Vermont regulators over outages on the brokerage’s trading platform and lax supervision of accounts.

The firm is still grappling with the fallout from a series of disruptions on its brokerage app in March 2020, when trading volumes surged at the onset of the pandemic. The Vermont Department of Financial Regulation said at least 40 customers in the state complained to the regulator or Robinhood, according to a statement Thursday.

Regulators also found that Robinhood’s automated process for approving investor applications wasn’t rigorous enough to determine which customers should have access to advanced options and margin trading, features that increase financial risks.

Shares of Menlo Park, California-based Robinhood climbed 7% to $13.67 at 1:54 p.m. in New York. The stock has tumbled 64% since its initial public offering in late July.

“The settlement resolves historical matters that do not reflect Robinhood today,” said spokeswoman Jacqueline Ortiz Ramsay.

[MORE: Robinhood to pay record $70 million in Finra settlement]

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