Tremendous well-liked investing app Robinhood is having extra authorized issues within the state of Massachusetts. State regulators need to revoke the corporate’s broker-dealer license, an escalation of the battle that has been occurring for months regarding the firm’s advertising and marketing methods.
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The problems in Massachusetts all began a couple of months in the past, with state regulators submitting a 24-page grievance towards the corporate. Within the grievance, regulators declare that Robinhood maliciously focused inexperienced merchants utilizing gimmicks like exploding confetti, which might make the app thrilling to new, youthful customers. Within the time because the authentic grievance was filed, the corporate mentioned that they are going to be eradicating a few of these options that will have made investing appear extra like a recreation.
Moreover, regulators declare that Robinhood has didn’t account for fractional shares traded on the platform. In accordance with regulators, failure to do which means Robinhood has confirmed itself incapable of following probably the most fundamental necessities.
Robinhood launched an announcement responding to the amended grievance filed lately. The corporate’s CEO, Vlad Tenev, famous in a weblog put up on the corporate’s web site:
The corporate claims that this grievance is an entire overreach of the state regulators’ powers. By eliminating Robinhood in Massachusetts, the corporate claims that regulator could be setting the state’s residents again in time, by taking away a instrument that brings investing to extra folks. The corporate additionally filed a grievance and movement with the Massachusetts State Courtroom to cease the regulators’ case.
That is simply the newest in a protracted line of adverse PR for Robinhood. Not too long ago, there was a problem with the platform proscribing shopping for and promoting whereas shares like GameStop soared. The corporate was lately fined $65 million by the SEC, and the corporate was additionally sued by the mother and father of a 20-year-old who killed himself after his account falsely confirmed a adverse $730,000 steadiness.
Regardless of all of this, the app has continued to rise in recognition. It is going to be fascinating to see how all of this performs out within the state of Massachusetts.
