Institutional brokerage firm Robinhood Financial LLC is set to pay some $70 million in a bid to resolve the regulatory investigation regarding issues on its platform, the WSJ reported.

  • The Financial Industry Regulatory Authority announced the settlement, saying it is fine with innovation but not at the cost of compliance and supervision. It said Robinhood agreed to pay a $57 million fine and $12.6 million in compensation for harmed investors.
  • The fine is the biggest ever carried out by FINRA, which also ordered Robinhood to tap a consultant that would review its compliance systems within six months. The firm will have three months to comply with any recommendations made.
  • FINRA earlier looked into claims involving the opening of new accounts or trading strategies and possible issues on identity theft and fraud with 90,000 accounts opened from 2016 to 2018. It also said Robinhood misled traders on margins.

FINRA will also roll out a $30-million information campaign for new investors who use applications like Robinhood.