{"id":131680,"date":"2020-12-16T20:23:15","date_gmt":"2020-12-16T14:53:15","guid":{"rendered":"https:\/\/ambcrypto.com\/?p=131680"},"modified":"2020-12-16T20:23:15","modified_gmt":"2020-12-16T14:53:15","slug":"massachusetts-regulators-to-start-legal-case-against-robinhood","status":"publish","type":"post","link":"https:\/\/ambcrypto.com\/massachusetts-regulators-to-start-legal-case-against-robinhood\/","title":{"rendered":"Massachusetts regulators to start legal case against Robinhood"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Regulators in Massachusetts are planning to file a legal complaint against California-based trading app Robinhood. A<\/span><span style=\"font-weight: 400;\">uthorities allege that the digital investment platform aggressively marketed to inexperienced investors without having any controls in place that offer to protect users, as reported by the<em> Wall Street Journal<\/em>.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to the<a href=\"https:\/\/www.wsj.com\/articles\/massachusetts-regulators-to-file-complaint-against-robinhood-11608120003#:~:text=Caitlin%20McCabe,-Biography&amp;text=Massachusetts%20securities%20regulators%20are%20expected,implement%20controls%20to%20protect%20them.\"> report<\/a>, Massachusetts Securities Division has accused Robinhood of \u201cfailing to protect its customers as well as their assets.\u201d In addition to this, the draft of the complaint alleges Robinhood violated \u201cstate laws and regulations.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Earlier this year, new regulations came into place that now requires brokers to act in their users\u2019 best interest. However, t<\/span><span style=\"font-weight: 400;\">he WSJ report said that a draft of the administrative complaint that runs for over 20-pages claimed:\u00a0\u00a0\u00a0<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">Robinhood exposed Massachusetts investors to \u201cunnecessary trading risks\u201d by \u201cfalling far short of the fiduciary standard&#8230;\u201d\u00a0<\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">A Robinhood spokeswoman claimed that the firm had not seen the complaint, but that it would continue to work closely with all regulators. She told the WSJ:\u00a0<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">Robinhood has opened up financial markets for a new generation of people who were previously excluded&#8230;We are committed to operating with integrity, transparency, and in compliance with all applicable laws and regulations.<\/span><\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">Robinhood Markets, Inc. is registered with the US Security and Exchange Commission and enables its users to invest in stocks, ETFs, and options through Robinhood Financial and crypto trading through Robinhood Crypto.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The startup brokerage had <\/span><a href=\"https:\/\/blog.robinhood.com\/news\/2020\/8\/17\/series-g\"><span style=\"font-weight: 400;\">announced<\/span><\/a><span style=\"font-weight: 400;\"> in August that it raised $200 million in funding, which increased the firm\u2019s valuation to $11.2 billion. However now, Robinhood boasts over 13 million client accounts, of which, those clients are offered to trade stocks and crypto, free of commission fees.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to the complaint, Robinhood focused on the \u201cgamification\u201d of investing. Other <\/span><span style=\"font-weight: 400;\">accusations in the document also stated that several times, Robinhood has allowed investors with little or no experience to access trading tools. <\/span><span style=\"font-weight: 400;\">The report stated:<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">Like many brokerages, Robinhood makes money by [&#8230;] sending customer orders to trading firms in return for cash payments. Robinhood prioritized its revenue over the best interest of its customers\u2026<\/span><\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>Regulators in Massachusetts are planning to file a legal complaint against California-based trading app Robinhood. Authorities allege that the digital investment platform aggressively marketed to inexperienced investors without having any controls in place that offer to protect users, as reported by the Wall Street Journal.\u00a0 According to the report, Massachusetts Securities Division has accused Robinhood<a href=\"https:\/\/ambcrypto.com\/massachusetts-regulators-to-start-legal-case-against-robinhood\/\">Continue reading <span class=\"sr-only\">&#8220;Massachusetts regulators to start legal case against Robinhood&#8221;<\/span><\/a><\/p>\n","protected":false},"author":34,"featured_media":131681,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"footnotes":""},"categories":[31,3,20],"tags":[],"class_list":["post-131680","post","type-post","status-publish","format-standard","has-post-thumbnail","category-altcoins-news","category-news","category-trading-view"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Massachusetts regulators to start legal case against Robinhood - AMBCrypto<\/title>\n<meta name=\"description\" content=\"The 20 page complaint against Robinhood reportedly came from the Secretary of the Commonwealth of Massachusetts, William Galvin.\u00a0\" \/>\n<meta name=\"robots\" content=\"index, follow, max-image-preview:large\" \/>\n<link rel=\"canonical\" href=\"http:\/\/ambcrypto.com\/massachusetts-regulators-to-start-legal-case-against-robinhood\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Massachusetts regulators to start legal case against Robinhood - AMBCrypto\" \/>\n<meta property=\"og:description\" content=\"Regulators in Massachusetts are planning to file a legal complaint against California-based trading app Robinhood. 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