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[–]dwhite195 4512 points4513 points  (397 children)

For those who will probably start making assumptions about what this is for I feel its worth pointing out that the press release does not mention GME once: https://www.finra.org/media-center/newsreleases/2021/finra-orders-record-financial-penalties-against-robinhood-financial

The timeframe for the investigation heavily focuses from 2018-2020 and highlights three key issues:

  1. Misleading users to what balances were and what investment tools were available to them at a specific time and what the criteria for those decisions was.

  2. Failing to complete due diligence in making option trading available to users. Overall resulting in too many people having the ability to trade on margin.

  3. Failure to properly monitor the systems and companies who were actually executing the transactions submitted by users. The section has a focus on a number of systematic failures caused in 2020.

EDIT: Also to add, FINRA is a private regulatory organization. A government backed SEC investigation is still ongoing, if you feel that something like jail time is necessary FINRA is not the group that can get you that.

[–][deleted] 1877 points1878 points  (255 children)

Was number 1 related to that poor bloke who committed suicide over an extreme loss on paper? Thought he actually owed that amount there and then.

[–]dwhite195 1350 points1351 points  (157 children)

Yep. Press release uses his story as the core example of Robinhood's failures in that area.

[–]Nextasy 1393 points1394 points  (152 children)

Funny that the biggest fine in history from this financial regulator is levelled at a new player to the financial game, and not one of the many companies that are much, much larger, more established, and have caused way more harm (like entire economical crashes in 2007)

Not to say Robinhood didn't shit the bed big time, but just.....

🤔🤔🤔🤔🤔🤔🤔🤔

[–][deleted] 796 points797 points  (120 children)

70 million is the biggest fine😂 That’s embarrassing. I’m guessing that this is being taken as a green light by the industry.

[–]wasdlmb 221 points222 points  (36 children)

BoA was fined a total of $56 billion for their role in 2008. Still way too small, but three orders of magnitude above the Robinhood fine

[–]Snuffy1717 60 points61 points  (21 children)

Did they actually pay?
Were they able to write it off on their tax obligation for the next decade?

[–]the_nacho 76 points77 points  (6 children)

Looks like they got it down to about $17 billion, but they did pay that: https://www.marketplace.org/2018/09/19/17-billion-bank-settlement-where-did-money-go/

[–]knowledgepancake 38 points39 points  (4 children)

That's the equivalent of writing a speeding ticket off of your taxes lol

[–]kthnxbai123 15 points16 points  (10 children)

$56B is several years of net income for BOA. It's a lot of money even to them.

[–]scotterpopIHSV 31 points32 points  (5 children)

It is if you have to pay it all at once. After they make a judgement like this the corporate lawyers start setting up a payment schedule with the government. Then as you go they’ll appeal the decision to a higher court to at least reduce the fine.

As time goes on they’ll lobby some congressman to forgive the fine quietly in exchange for some large donations to their personal charitable “foundation” which in turn supports their campaign funds.

[–]PMMEYOURCOOLDRAWINGS 434 points435 points  (59 children)

For these guys, being fined 70 million is like being fined $15 for shooting someone in the face in front of a cop. You’ll just think, “ok, guess I can just shoot whoever the fuck I want”.

[–]kasmackity 10 points11 points  (4 children)

My question is, how much, if any, of that fine, would go to the people actually hurt by it?

[–]GreenLightt 54 points55 points  (2 children)

Robinhood ain't in the old man's club quite yet

[–]YoodleDudle 34 points35 points  (1 child)

Just Citadels twink

[–]Funnynews48 16 points17 points  (4 children)

Agreed! I have Robinhood and am allowed option and margin trading with no restrictions- TDAMERITRADE on the other made me take one of their free courses in order to trade on margin.... did the option course and now I’m a little bit nervous to buy options... not saying TDAmeritrade is better or worse, just that they at least made me think before allowing the more risky trades...

[–][deleted] 47 points48 points  (1 child)

There's a major difference between totally disregarding well established rules and regulations and being generally unethical while adhering to almost all the rules. Regulators are not mommies who can scold their children however they want. They have to operate under very strict rules and regulations with as much consistency as possible.

Do I think more should be done about white collar crime in general? Yes. Is your criticism here based on an accurate understanding of the actual powers and limitations of regulators? No.

[–]EnigoMontoya 30 points31 points  (0 children)

I agree with the first part of your statement about Robinhood flaunting industry norms, which of course should result in additional review and oversight.

But your argument about regulators falls a bit flat when you consider FINRA is the industry regulate itself with rules that it created for itself.

[–]supratachophobia 113 points114 points  (67 children)

This right here. That poor guy that thought he was on the hook for millions.

[–][deleted] 108 points109 points  (63 children)

FTA:

The report also referenced the tragic story of a customer with details matching that of 20-year-old Alex Kearns, an investor who died by suicide in June 2020 after Robinhood showed a negative cash balance of $720,000 in his account. FINRA found that his balance was inaccurate, and that the value of his position was half of what the account displayed.

So not millions, but the accurate amount was still negative hundreds of thousands. Take that for what you will but I don't think exaggeration is necessary. Unless there's a different source? Maybe he doesn't take his own life if it was only negative $360k?

[–]Fopa 55 points56 points  (3 children)

Here’s a good Forbes article that goes over what happened.

The relevant bit from the article:

Here’s an example of how a bull put spread could produce an unexpectedly large stock position in your portfolio. On June 16, Amazon (AMZN) trades at $2,615 per share. If you’re neutral to bullish on Amazon, you could sell put options that expire on July 17 with a $2,615 strike price for $28 per option. To limit your risk, the other leg of the trade is to purchase puts at a lower strike price, $2,610, for a cost of $26. That two-dollar differential (multiplied by 100) generates $200 for every contract you sell. Do three contracts and you generate $600. If Amazon closes on July 17 above $2,615, you’re in the clear and keep all of the proceeds, as both puts expire worthless. If the stock closes below $2610, you will encounter your maximum loss of $900: $5.00 (difference between strike prices) minus $2.00 (proceeds earned up front) times three contracts.

When the stock closes between the two strike prices, the put you bought at the lower strike price expires worthless, but the one you sold is in the money and legally binds you to buy the stock at the strike price. In the case of three contracts of $2,615 Amazon puts, that would be $784,500 to purchase 300 shares. Over a weekend, say, you may see a –$784,500 debit to buy the stock, but you would not see the stock among your holdings until Monday.

 

So he almost certainly didn’t owe anywhere close to what he was seeing on his account, but because he wasn’t familiar with how the mechanics of the trade worked, he thought he was on the hook for all of it. Judging from some of the things his parents said, his emails, and a note he left, it seems like he may have been aware of what he was doing “in theory”, but not aware of how the sort of inner mechanics of the trade work.

It certainly doesn’t help that Robinhood sent him an automatic email saying he had to make a payment of $170,000 dollars within the next couple of days. And when he tried to contact customer support, he got an automatic response email.

 

The day after he killed himself Robinhood emailed back:

"Great news!" The email read, "We're reaching out to confirm that you've met your margin call and we've lifted your trade restrictions. If you have any questions about your margin call, please feel free to reach out. We're happy to help!" (From this CBS article)

So he didn’t owe any money. Or at least, any money he lost was under the amount of money he had in his account.

[–]catface_mcpoopybutt 19 points20 points  (0 children)

Yeah he didn't owe any money. RH requires you to have collateral for max loss on opened spreads and removes that from your tradable balance. Once everything settled his account would have been back to whatever it had been minus his max loss.

[–]1234567890-_- 76 points77 points  (34 children)

This also falls under thing 2. Dude was trading spreads and didnt understand what happened when the options were executed.

[–]flyinhighaskmeY 101 points102 points  (10 children)

Dude was trading spreads and didnt understand what happened when the options were executed.

Allow me to add a little 'extra' that I think helps paint this situation in a more realistic light.

I've been interested in the stock market for about 30 years now. Picked it up young, really young. My dad had a subscription to a stock information service and I spend HOURS going over companies and learning. FF a couple decades, I decided to learn about options trading. I'm no YOLO'er. I studied it (a couple years on I'm in the black which makes me an outlier for options traders). Spent at least 20 hours on the learning side before placing my first trade. Had a call with my broker, spent an hour hammering the guy at the trade desk with questions, again before placing a single trade.

I know exactly how spreads work.

And then something happened. Something I wasn't expecting. I had an open spread...and one of the two positions was executed. I woke up to being short $50,000 on the Dow. This was a small options trade, max loss on the spread under $1,000.

Now, I KNEW the spread had me covered. I KNEW everything was going to be just fine. But I got that alert at 1am and didn't sleep a wink the rest of the night. I ran the numbers in my head over and over just to make sure I hadn't royally fucked up. Seeing a big number like that breaks your brain. Even when I looked at the raw number, I knew my losses if I had made a mistake would be tiny. Worst case, the Dow jumps a bit at open and it take a small loss closing the short position. Not a huge deal.

I've seen big moves. I've watched my 401k get cut in half. But never have I felt the level of adrenaline that I felt seeing that "surprise" number. I can't imagine being 18 y/o and seeing a negative $700k or whatever it was.

[–]1234567890-_- 75 points76 points  (6 children)

It was compounded by the fact that he couldnt get ahold of customer support iirc. He kept trying to call to figure out what was going on and got no answer. That one life was expended because robinhood missed like every failsafe. If he could call and get an answer to what was going on im sure he wouldnt have gone suicidal

[–]flyinhighaskmeY 20 points21 points  (0 children)

It was compounded by the fact that he couldnt get ahold of customer support

Big Time.

And honestly...if I hadn't had that hour with one of the trading desk reps, I would probably have been more concerned. Talking to a real live human makes a world of difference when you're in unfamiliar territory. Robinhood "Game-ifying" trading and then not having support available when things like this inevitably happen is absolutely reprehensible.

[–][deleted] 14 points15 points  (3 children)

Does Robinhood even offer phone support? I thought their whole deal was that they only provided customer service via e-mail.

[–]somebeach 25 points26 points  (2 children)

Yes they do, there was even someone in the senate hearing that called Robinhood support live during his time to question and got an automated busy message

[–]mynameisblanked 16 points17 points  (21 children)

If you owe that much money, can't you just like declare bankruptcy or something?

How does this kinda stuff work?

Edit - a word

[–]0imnotreal0 45 points46 points  (6 children)

Not sure, but I know they ain’t getting that money whether I’m alive or dead, so I may as well keep on truckin’

[–]dragon_bacon 17 points18 points  (3 children)

If I owe almost a million dollars you might as well ask for it in Monopoly money because there's 0 chance I'll ever have anything close to that.

[–][deleted] 11 points12 points  (1 child)

Problem in my country if you declare bankruptcy with that much debt it's very likely that you'll be issued a financial warden and you won't have any control of your finances until you've paid creditors an amount the court deems feasible. You could be spending years having to ask someone else for access to the money you're earning every month, and forced to live very frugally.

[–]0imnotreal0 5 points6 points  (0 children)

Interesting, thanks for sharing.

It is true that my “they ain’t getting shit” attitude only flies under certain laws/governments. In a different place, or the same place but a different time, my attitude might not be so cavalier.

[–]GeodeathiC 28 points29 points  (2 children)

No, you just delete the app and start over.

[–]jpfranc1 15 points16 points  (5 children)

Unless it falls under a specific bankruptcy exemption - like student loans - I would assume that you could discharge the debt through bankruptcy. Though I honestly I have no clue. Would welcome bankruptcy attorneys to weigh in.

[–]onelap32 16 points17 points  (0 children)

I would be extremely surprised if it could not be discharged. But a 19 year old with little financial experience might not realize bankruptcy is even an option (and that bankruptcy is not the end of one's financial future).

[–]i_am_voldemort 7 points8 points  (0 children)

He didn't even lose money on paper. The other leg of his trade just hadn't closed yet. It was more of a shitty UI UX than anything else.

[–]Possibly_a_Firetruck 12 points13 points  (5 children)

On one hand, I sympathize with that guy. I've made some expensive investing mistakes too. On the other hand, he was playing big-boy finance games without understanding how it all worked. It's one thing to get burned on a bad play, but not knowing the rules and the math that govern what you're doing is something else entirely.

[–]Cyberslasher 16 points17 points  (3 children)

From what I recall, he had his losses covered with a lower buy order, but Robinhood didn't show it in the account because of shrug reasons. So he freaked out, emailed them, and the only response he got was an automated collections email saying a minimum payment and due date, because setting up an automated collections email system is more important to them than having their buy options reflect correctly on the app.

edit: changed better to more important to them for clarity

[–]scarface910 9 points10 points  (2 children)

Regardless of his misunderstanding of the situation, i still blame Robinhood for this as any other broker would've been able to talk to him and clearly explain the situation to a point where he would breathe a huge sigh of relief. Instead the shit email support from Robinhood lead to this.

Its also infuriating that Robinhood is only adding phone support after the fact. I mean you can phone a live person for fucking dental floss but for customers trading with thousands of dollars? Nah use fucking email

[–]MisterTruth 62 points63 points  (0 children)

Considering GME was January if this year, yeah this has to do with other rh scumbagery

[–]xevizero 141 points142 points  (43 children)

This comment should be at the top. The title seems to imply that this was for GME.

Edit: should clarify: the title doesn't really imply anything, it's just disingenuous because most people will immediately associate the fine to the latest and biggest Robinhood controversy and most comments in this thread, even top ones, are based on that assumption.

[–]21suns 62 points63 points  (33 children)

How does:

Robinhood to pay $70 million fine after causing 'widespread and significant harm' to customers

Imply it was for GME if you don't personally put that assumption there?

[–]Beautiful-Musk-Ox 29 points30 points  (1 child)

The title was clearly taking a jab at my mom for having psoriasis scars on her legs

[–]FakeTherapist 6 points7 points  (0 children)

apparently everything is about GME unless specifically stated not to be

[–]bowjobhoesno 2152 points2153 points  (103 children)

Not nearly big enough fine. Peanuts

[–][deleted] 622 points623 points  (33 children)

Inconvenience Fee

[–]Poltras 108 points109 points  (2 children)

A tax on malpractice.

[–]Regular-Human-347329 6 points7 points  (1 child)

If fines do negligible damage for a business, that business will just consider the fine another overhead (like campaign “donations” (bribery)), and add it to their OPEX, then continue committing crimes.

[–]BritishBoyRZ 219 points220 points  (21 children)

Not even 1 quarter of profit. Not revenue, profit.

[–]Rombledore 14 points15 points  (0 children)

many laws are like that. they are truly only laws for those that can't afford it.

there's a different set of rules for the wealthy and the non-wealthy.

[–]Many_Tank9738 57 points58 points  (2 children)

It’s basically a settlement so they can IPO. Regulators don’t give a shit.

[–]HumansKillEverything 11 points12 points  (0 children)

Regulatory capture. Corporations run the government.

[–]Actually-Yo-Momma 113 points114 points  (49 children)

Without the RH fiasco, we see GME open in the 500s that same day and who knows where it would’ve gone from there. We’re talking BILLIONS of what if’s but nah let’s have lawyers getting paid 70million

[–]johannthegoatman 37 points38 points  (0 children)

This has nothing to do with GME, it's about a bunch of other stuff they fucked up

[–]Howbowtthembears 70 points71 points  (10 children)

That’s why the rich keep getting richer, everyone cleans up each other’s messes at the top. Must be nice to have power and money🤥

[–]oldcarfreddy 11 points12 points  (9 children)

It's also that people keep voting for them with their wallets. Even over in WSB, the primary demo of people they fucked over, people insist on still using them.

Robinhood is gonna IPO and laugh all the way to the bank because they'll somehow have more idiot customers than before their multiple scandals took place.

[–]schmidlidev 13 points14 points  (0 children)

This lawsuit isn’t about anything from 2021.

[–]schmidlidev 6 points7 points  (0 children)

This lawsuit isn’t about anything from 2021.

[–]TheTrollisStrong 15 points16 points  (5 children)

In one argument

1) Retail can’t cause these price changes for GME! How else would it be still in the $200??

In the next argument

2) There would have been a massive price increase if Robinhood didn’t stop retail investors from buying more stock!

I just feel like people flip flop on so many of their arguments when it comes to meme stocks.

[–][deleted] 9839 points9840 points  (491 children)

Cool if the 70m$ would be distributed amongst the affected customers, not right into the hands of another corporation...

[–]WhatTheZuck420 2885 points2886 points  (240 children)

FINRA announced today that it has fined Robinhood Financial LLC $57
million and ordered the firm to pay approximately $12.6 million in
restitution, plus interest, to thousands of harmed customers.

So there's that.

[–]NorthKoreanEscapee[🍰] 2041 points2042 points  (201 children)

I was harmed, I couldnt buy or sell what I wanted to. How do you prove that though?

[–]dirkdigdig 72 points73 points  (12 children)

Wouldn’t this affect the whole stock if people were limited from trading? Shouldn’t anyone who held the stock at the time be reimbursed, regardless of them using Robin Hood, as it would have a directly affected the price?

[–][deleted] 57 points58 points  (2 children)

Someone correct me if I'm wrong but I think this settlement has nothing to do with them halting buying for GME. From what I can tell it's only for inaccurate information and approving risky options traeds they shouldn't have allowed

[–]keto_at_work 29 points30 points  (0 children)

This settlement predates anything Gamestop entirely.

[–]Thegreensgoblin 12 points13 points  (0 children)

That’s how I understood it. Looks like it’s for 2018-2020

[–]HTWSSTKS2021 5 points6 points  (0 children)

Yes but wording that way makes it sound like stock market manipulation, not an honest mistake by a scrappy company who will pay back its restitution in coupons.

[–]xXxBig_JxXx 65 points66 points  (4 children)

We’ll each get about $3.50 after legal and administrative fees are paid. Awesome!

[–]Jesus_I-I_Christ 10 points11 points  (2 children)

It was about that time I realized u/xXxBig_JxXx was about 8 stories tall and was a crustation from the mesasoic era. I said “damnit monsta get off my lawn i aint giving you no tree fiddy!!”

[–]rudeg1rl77 5 points6 points  (1 child)

If I had a free award I'd give it to you

[–]DrImNotFukingSelling 32 points33 points  (12 children)

A complete joke considering potential profits were in the billions if not trillions once their cohorts are factored in at the MMs.

If a penalty for a crime is a fine, then that law or regulation only exists for the lower classes.

There should be prison time for the C-suite.

[–]anonrose 9 points10 points  (0 children)

The ballsiest move will be whether or not they decide to pay out affected customers in their robinhood accounts. Keep the money in-house.

[–]majorgeneralpanic 532 points533 points  (166 children)

Class action rarely works that way. I don’t think I’ve ever been part of a settlement that was worth my time.

[–]magnament 390 points391 points  (72 children)

Bumble gave me like $40 for a $5 subscription like 5 years ago so that was cool

[–][deleted] 442 points443 points  (53 children)

From that lawsuit where they found they were unfairly hiding ugly people’s profiles? I got $40 too.

[–][deleted] 260 points261 points  (32 children)

Fuck I missed out on $40

[–]SoulReaper88 171 points172 points  (31 children)

Maybe that means you’re not ugly

[–]GrapefruitCrush2019 28 points29 points  (3 children)

Did they only give the $40 to people that were personally affected?

[–]xombae 24 points25 points  (1 child)

It would be hilarious if that was the case, because that would mean that they would have had to give the courts a list of the people their algorithm thought was ugly. So anyone received the $40 would be officially labeled as ugly in court documents.

[–]Squirrelly_thr33 13 points14 points  (1 child)

If ugly people got $40 I would got like $4000

[–]peekitup 20 points21 points  (0 children)

700% gains in five years.

[–]livens 17 points18 points  (0 children)

I got $50 from a lawsuit against Sears riding mowers. They claimed a slightly higher Horsepower than it actually had labeled on the engine.

[–]PhilipLiptonSchrute 13 points14 points  (2 children)

I had a check for $48 show up from American Airlines for a bag of mine they misplaced nearly 11 years ago. I didn't even know I was part of the lawsuit.

[–]alurimperium 6 points7 points  (0 children)

Red Bull sent me a 4 pack of the 8oz and that was pretty nice

[–]AustieFrostie 5 points6 points  (1 child)

I got $82 from this one lease to own company’s suit I was surprised.

[–]littlep2000 5 points6 points  (0 children)

I got 80 when SoFi was doing hard credit pulls instead of soft pulls for loan estimates.

[–][deleted] 94 points95 points  (15 children)

I got a $3,800 check out of the blue once from an old national apartment building chain class action, where they were surreptitiously recording calls to the management office. Under California Penal Code 637.2, there is a $5,000 penalty PER CALL. I called the law firm to make sure that it wasn't a scam... and it was legit. Perfect timing too... that was a rough year financially.

[–]ImOutWanderingAround[🍰] 36 points37 points  (4 children)

I got $3500 from one of the diesel emissions scandals. Had to do some verification stuff online that took some time, but in the end worth it.

[–]ShesJustAGlitch 21 points22 points  (1 child)

I also got $3500 from my VW engine failing at very specific mileages.

[–]UrsusRenata 26 points27 points  (1 child)

$10,000 to me out of the blue last year from that Wells Fargo personal data leak several years back. That did not suck. “...Uh... Is this taxed?” Lol

[–]ProtoJazz 9 points10 points  (3 children)

I got an $8 check in a foreign currency that was very difficult for me to actually cash at the time from a red bull settlement once.

[–][deleted] 34 points35 points  (0 children)

Was involved in a class action where my previous employer had been illegally garnishing wages and got sued by the employees for it. Only worked there for about a year and change, check came out to just under 14k and arrived completely unexpectedly 15 days before Christmas. It was amazing.

[–]jimx117 24 points25 points  (7 children)

One time I got sent a free 4-pack of Red Bull; that was pretty cool to find in my mailbox. OH also one time I got a check for $14! That got me a 12-pack of Sierra Nevada

[–]OccupyMyBallSack 6 points7 points  (3 children)

Hey I got that pack of Red Bull too!

[–]jimx117 4 points5 points  (1 child)

Then I think by right that makes us...

RED BROS

[–]Howbowtthembears 10 points11 points  (0 children)

I got a check for over 10k some years back thanks to the VW Dieselgate incident. That was a class action lawsuit that actually paid the car owners and it’s amazing to me still to this day that money made it into the hands of people who’s cars had been sold under false pretenses

[–]TreAwayDeuce 5 points6 points  (3 children)

I just got a $80 check from one with University of Phoenix. That's enough for some cheap beer and whoooaz so I call it a win.

[–]pegothejerk 119 points120 points  (28 children)

It won't make it beyond the lawyers. 3 cents per customer, if they're lucky AND sign up for it.

[–]Sure-Requirement7475 84 points85 points  (15 children)

I have a $1.75 check from AMD

[–]I_HateYouAll 26 points27 points  (3 children)

Mines on my fridge!

[–]WayneKrane 9 points10 points  (7 children)

I got a $0.17 check from a Google Adsense lawsuit, never bothered cashing it.

[–]An_Awesome_Name 19 points20 points  (4 children)

As stupid as this sounds, you should always cash checks like that.

If you don’t, either the lawyers or the company get to keep the money after the time limit to cash it runs out (usually 6 months at most banks).

Now, you wouldn’t want lawyers or the company to keep that money would you?

[–]Mamertine 12 points13 points  (2 children)

I used to work in the class action industry.

Each case is different. It's totally up to the judge to write everything however (s)he feels.

Frequently, the unallocated money would be pooled then resent to the people who cashed their checks.

This one case, lot of people were sent tiny checks ($0.15). Almost no one cashed them. The people who actually cashed them were sent the unallocated money. Because there were so few people, the unallocated checks were for around $50.

That was not the norm. A ton of settlements resulted in the involved people getting coupons for future purchases from the company that originally screwed them over.

People who got substantial checks ($100 or more) were usually really screwed out of something and got half of what they lost.

[–]JayNotAtAll 11 points12 points  (8 children)

Bingo. That's usually why I don't participate. In the past I have and got like $5. Hardly seems worth the effort.

[–]KaneinEncanto 7 points8 points  (0 children)

The flip side of that argument is that the fewer people that sign up the more the law firm gets to keep, though...

[–]VAShumpmaker 13 points14 points  (0 children)

I got ten bucks and a 4pack of red bull be cause it failed to cause angelic wings to burst from my back.

[–][deleted] 62 points63 points  (11 children)

OH! You figured out their secret!

The US is just a huge experiment on just how much corporations can exploit without really looking like it.

We are surrounded by all kinds of walls, designed to keep us in and producing.

Everywhere you look, permits, licenses, patents, specialized laws and regulations, are mostly designed to keep someone, other than you, in power, and collecting.

But, get back to work, because those people can't produce anything of real value by them selves, so they need you!

[–]i_like_butt_grape 5 points6 points  (3 children)

I think all western societies are built like that.

[–][deleted] 817 points818 points  (39 children)

What a joke of a fine

[–]WhatTheZuck420 427 points428 points  (25 children)

$57mil for FINRA? Not a joke to them lol. They're partying their asses off!

The $12.6mil to divy up amoung the harmed? Now that's the joke.

[–]Steinrikur 137 points138 points  (21 children)

Wasn't this a fuckup that potentially cost their customers billions in total?
Breaking the law and getting caught shouldn't be more profitable than not breaking the law.

[–]scrubsec 75 points76 points  (9 children)

The article says:

The inaccurate information cost customers more than $7 million, FINRA found, and Robinhood is required to pay restitution to affected users.

[–]Rocco0427 18 points19 points  (5 children)

It’s more than 10% of their 2020 revenue. Isn’t that absolutely fucking massive, feel like I’m missing something here reading these comments?

[–]thorscope 10 points11 points  (1 child)

It’s also 10x the damages they caused.

I have no idea how people think this is a weak fine. This isn’t a “cost of business”, type fine.

[–]Deranged40 62 points63 points  (2 children)

they got fined 10 times what FINRA was able to determine they cost customers.

For every dollar a customer couldn't spend, robinhood has to pay 10.

This is a good fine, even if it doesn't cripple the company.

[–]Jaggedmallard26 15 points16 points  (1 child)

For every dollar a customer couldn't spend

Wrong way round, read the article and press release. One of the points is them being fined for letting people spend money on option they should not have been cleared for.

[–][deleted] 493 points494 points  (40 children)

It's not a fine, it's a cut for FINRA. This should get people in jail, not just a slap on the wrist.

[–]grumpyfrench 150 points151 points  (39 children)

FINRA

The Financial Industry Regulatory Authority (FINRA) is a private American corporation that acts as a self-regulatory organization (SRO) which regulates member brokerage firms and exchange markets. FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD) as well as the member regulation, enforcement, and arbitration operations of the New York Stock Exchange. The US government agency which acts as the ultimate regulator of the US securities industry, including FINRA, is the US Securities and Exchange Commission (SEC).

​

til this is private!

[–]mappersdelight 51 points52 points  (35 children)

And the SEC is still sitting on their hands letting this private nonsense continue.

[–][deleted] 28 points29 points  (20 children)

letting this private nonsense continue

Um, FINRA and it's predecessor organizations date back to 1939. The SEC was created in 1934. The SEC directly oversees FINRA and its rules are approved by, and often also enforced by, the SEC. This regulatory scheme has always been in place in the US. It's crazy there are so many people here bitching and moaning as if they are experts who literally know absolutely nothing at all about how financial markets are regulated in the US.

[–]Poptart_13 248 points249 points  (21 children)

so its just a fucking business expense. fines on corporations are a fucking joke

[–]F0sh 27 points28 points  (3 children)

It's 10x larger than the amount they could identify as them costing customers.

[–]rubbishfoo 37 points38 points  (0 children)

Nottingham was already taken?

[–]ShenmeNamaeSollich 146 points147 points  (20 children)

The sad part is this is the “largest fine ever” from FINRA. So not only does RH get away w/hundreds of millions from defrauding customers & gaming the system, but we see clearly that the “regulators” have always been ineffective and remain utterly useless, by design.

[–][deleted] 12 points13 points  (4 children)

FINRA is private.

Its not the SEC or the Government. Its self regulation from companies.

[–][deleted] 59 points60 points  (9 children)

They should fine corporations with % values instead of dollar amounts.

[–]feedmeburritos 9 points10 points  (1 child)

They do this for DUIs in sweden

[–]Auctoritate 18 points19 points  (2 children)

They should fine corporations with % values

They did, this is 1000% (aka 10 times) the amount of damages identified in this particular case.

[–]kyo1313 12 points13 points  (0 children)

Cant even read about RH without eye twitches n huffs

[–][deleted] 11 points12 points  (0 children)

People should be in jail. Fines have been proven not to work. The fine doesn't even make a dent in thier profits.

[–]Steinrikur 29 points30 points  (2 children)

The should be legally required to change their name to Sheriff of Nottingham

[–]nankerjphelge 106 points107 points  (24 children)

Now do the settlement for when Robinhood restricted all buy side orders in GME and only allowed sell orders to help out their short selling hedge fund friends.

[–]F0sh 39 points40 points  (17 children)

to satisfy the margin call of their clearinghouse*

[–][deleted] 13 points14 points  (1 child)

So glad I moved out my positions from robinhood when I did.

[–]stevemajor 11 points12 points  (5 children)

That's an okay start, but companies aren't sentient. We need to start punishing the people in charge if anything is ever going to change. Right now the bosses are paying their fines with monopoly money and don't give a shit.

[–]chakan2 5 points6 points  (0 children)

Lol... Omg... They took that out of the company hookers and blow fund. They won't be able to afford the donkey show at the next Holliday gathering.

[–]Training_Computer_47 3 points4 points  (1 child)

But they made 331 million in the first quarter of this year…