Robinhood was hit with new $45 million in fines from the Securities and Exchange Commission on Monday, the latest rebuke the beloved crypto brokerage has received from regulators.
The violations determined by the Securities and Exchange Commission span from 2019 to 2023 and included failure to protect sensitive customer data, employee use of encrypted messaging apps and errors in basic bookkeeping. The agency also said Robinhood had failed to fulfill its obligations to report suspicious customer transactions to authorities.
The allegations announced Monday involved a November 2021 incident in which a hacker obtained millions of Robinhood customer email addresses and names, along with a small number of what the brokerage described at the time as “extensive account details.”
The SEC said Robinhood failed to stop the attack despite being aware of its vulnerabilities in advance.
The regulator said Robinhood “admitted certain findings in the order and agreed to be penalized.”
In a statement, the company’s general counsel, Lucas Moscovici, described the operations as largely historical issues that have since been corrected. In a nod to the inauguration of President-elect Donald J. Trump next week, he said the company looks forward to working with the SEC under a new administration.
Robinhood quickly rose to prominence over the past decade by offering commission-free trading to investors and early to offer cryptocurrency and other related investments. Its previous admonitions from state, federal and industry regulators include fines of $65 million in 2020 and $70 million in 2021 for misleading customers.
Now publicly traded, Robinhood has a market capitalization of $35 billion.
