Robinhood faces a complaint by the Massachusetts securities regulator for failing to protect investors in the state from "unnecessary trading risks" on its platform, the Wall Street Journal reported.
Part of the complaint focuses on the company's breach of a new investor-protection rule that was implemented three months ago.
WSJ reviewed a final draft of a more than 20-page complaint laying out the above mentioned objections. The regulatory accusation supposes that Robinhood has nearly 500,000 customers in Massachusetts as of early December, amounting to about $1.6 billion in accounts. In total, the company has about 13 million users.
"Robinhood has opened up financial markets for a new generation of people who were previously excluded," a company spokesperson said in an email. "We are committed to operating with integrity, transparency, and in compliance with all applicable laws and regulations."
Source: News Formal (newsformal.com)