Robinhood Fined $1.25 Million Over How It Routed Customer Orders
- Firm failed to ensure clients got best prices in 2016 and 2017
- Company didn’t admit or deny Finra claims in settling case
Source: Robinhood
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Robinhood Financial agreed to pay $1.25 million penalty to a brokerage industry regulator for failing to ensure that its customers received best prices for securities orders.
Robinhood, which lets its customers trade stocks for free, routed all trades to four securities firms that paid it for order flow, the Financial Industry Regulatory Authority said in a Thursday statement. In doing so, Robinhood didn’t consider factors such as “price improvement” that it could have obtained for clients by sending trades elsewhere, the regulator said.