3 US Regulators Probing Robinhood's Actions Amid GameStop Trading Craze
FINRA, the SEC and the New York Attorney General’s Office are all making enquiries into the trading app provider.
Feb 27, 2021 at 9:37 a.m. UTCUpdated Aug 19, 2021 at 7:34 a.m. UTC
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Robinhood, the popular trading app for stock, options, gold and cryptocurrencies, has said it is fielding enquiries from several U.S. watchdogs over recent trading halts and other issues.
- According to a Reuters report on Saturday, the company said Friday that it's in settlement talks with the Financial Industry Regulatory Authority over temporary curbs to trading of certain stocks, as well as its policies on options trading.
- It's also been contacted by the Securities and Exchange Commission and the New York Attorney General’s Office, according to the report.
- Robinhood had halted trading in shares of GameStop (GME) and other stocks of such companies as Nokia (NOK) and AMC Entertainment Holdings (AMC) (and later cryptocurrencies) as a social media-driven retail trading frenzy attempted to force a squeeze on short sellers in January.
- The restrictions were later lifted, with Robinhood citing a spike in clearinghouse collateral requirements as the reason for the curbs.
- Some of the regulators' enquiries also reportedly relate to hacks of Robinhood user accounts in October.
- The brokerage is expected to launch an initial public offering this year at a valuation of $20 billion, Reuters said.
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