The investigation is in advanced stages and focuses on Robinhood’s failure to fully disclose its practice of selling customers’ orders to market-makers, sources familiar with the matter told The Journal. The brokerage could be forced to pay a fine of more than $10 million if it settles with the SEC, a source told the newspaper.
A fine hasn’t been negotiated between the two sides, one source said. A deal is unlikely to be announced this month, sources told The Journal.
“We strive to maintain constructive relationships with our regulators and to cooperate fully with them,” a Robinhood representative told Business Insider.
Bloomberg reported on Monday that both the SEC and the Financial Industry Regulatory Authority were investigating Robinhood and its handling of a daylong service outage in early March. The regulatory bodies are said to be particularly interested in Robinhood’s lack of client response during the outage.
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