Robinhood, the most popular brokerage firm in the United States, has agreed with regulators in the ongoing investigation. The giant vehicle has agreed to pay a $10.2 million penalty for failing to serve its customers during the COVID-19 crash.
The North American Securities Managers Association announced in a recent announcement that the brokerage firm's collateral accounts and approval process were deficient, and Robinhood's service was inadequate.
Association president Andrew Hartnett criticized Robinhood, saying:
"Robinhood has faced many interruptions during its service to its customers. We hope the company will be more sensitive to its customer obligations and make up for its shortcomings."
After the penalty agreement, Robinhood's director of state relations, Lucas Moskowitz, mentioned that they solved the problem jointly with the states. Moskowitz emphasized that they are glad that they left this process behind and that they are doing their best to ensure that customers do not face such problems again.
What Happened?
Robinhood, the brokerage house used especially by small investors in the USA, was providing a wide range of services to its customers from stocks to crypto currency trading. During the COVID crash in March 2020, Robinhood was down for a while. Customers were unable to sell their depreciating stocks and cryptocurrencies on time.
