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Robinhood Markets drew millions of users to financial markets with a colourful app that makes trading seem empowering instead of intimidating.
That very appeal thrust it into the regulatory crosshairs yet again on Wednesday.
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Massachusetts securities regulators filed a complaint against Robinhood Financial LLC, alleging the popular online brokerage aggressively marketed to novice investors and failed to put controls in place to protect them.
Robinhood exposed Massachusetts investors to “unnecessary trading risks” by “falling far short of the fiduciary standard” that requires broker-dealers to act in their clients’ best interest, according to a 23-page administrative complaint from the office of Secretary of the Commonwealth William Galvin.