Skip to content
Subscriber Only

Robinhood Pays $65 Million to End a Key Probe, But Others Fester

  • Firm didn’t properly disclose that it sold client orders: SEC
  • Robinhood says its practices are now fully transparent
Robinhood said it is now fully transparent in its communications with customers about how it makes money.

Robinhood said it is now fully transparent in its communications with customers about how it makes money.

Photographer: Gabby Jones/Bloomberg
Updated on

Robinhood Markets will pay $65 million to settle allegations that it failed to properly inform clients it sold their stock orders to high-frequency traders and other firms, putting a major compliance headache behind the brokerage even as new ones emerge.

The Securities and Exchange Commission fine stems from Robinhood’s decision to remove disclosures from its web site that detailed how it made money, the regulator said in a Thursday statement. The brokerage -- known for its immensely popular smart-phone app that offers commission-free trading -- hid from 2015 to late 2018 that its biggest source of revenue was funneling orders to Wall Street titans including Citadel Securities and Two Sigma Securities.