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Michelle Leder

Can $30 Million Solve Robinhood’s Legal Issues?

That’s just part of what it’s paying its team of former regulators.

Political issue.

Political issue.

Photographer: Daniel Acker/Bloomberg

Robinhood Markets Inc., which filed this month for permission to sell shares to the public, has no shortage of legal and political issues. The Financial Industry Regulatory Authority and the Securities and Exchange Commission have both fined it for misleading customers, among other things; SEC Chairman Gary Gensler criticized it for the gamification of stock trading; the SEC is looking into the order-flow payments that comprise most of its revenue; Massachusetts regulators are trying to ban it; prosecutors have executed a search warrant for Chief Executive Officer Vlad Tenev’s personal cell phone; legislators have publicly grilled Tenev; famed investor Charlie Munger has described the company as “sleazy” and “beneath contempt.”

So perhaps it shouldn’t be surprising that Robinhood has hired enough former employees of both Finra and the SEC to field a baseball team and still have three extra players — at exorbitant cost. Still, while it’s not the first company seeking to buy its way out of trouble, the speed and scale of its endeavor strike me as particularly brazen.