US State looks to ban Robinhood trading platform
17 Apr, 2021 11:17 PM
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Robinhood has sparked a massive surge in retail investment. Photo / AP
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By: Associated Press Staff Writers
Stakes are rising in Massachusetts legal battle against Robinhood Financial, and regulators are asking for the popular trading app s brokerage registration to be revoked, which would effectively bar it from the state.
Robinhood, meanwhile, calls the complaint brought by Secretary of the Commonwealth William Galvin s office elitist and based on a rule that should not apply in its case. It s asking to move the issue to a state court, rather than continue to work through an administrative process.
Massachusetts Looks to Bar Trading App Robinhood; Company Sues Massachusetts securities division alleged Robinhood used techniques to make investing seem like a game, such as showering users screens with confetti, in hopes of encouraging unsophisticated customers to make more and more trades
Published 2 hours ago
Pavlo Gonchar | LightRocket | Getty Images
Stakes are rising in Massachusetts legal battle against Robinhood Financial, and regulators are asking for the popular trading app s brokerage registration to be revoked, which would effectively bar it from the state.
Robinhood, meanwhile, calls the complaint brought by Secretary of the Commonwealth William Galvin s office elitist and based on a rule that should not apply in its case. It s asking to move the issue to a state court, rather than continue to work through an administrative process.
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Robinhood Market Inc. faces the risk of losing its license to offer stock trading in Massachusetts after the state’s regulators sought the revocation of its broker-dealer license.
The Massachusetts Securities Division said in an administrative complaint filed today that Robinhood should have its license revoked because it fails to protect vulnerable users and “poses a substantial and continued risk to Massachusetts investors.”
The attempt to have Robinhood’s license revoked is an extension of a case filed by the state in December accusing the company of violating state fiduciary rules for the conduct of broker-dealers. Among the accusations was that Robinhood uses strategies that treated trading as a game to lure young, inexperienced customers, Reuters reports, along with including having confetti rain down for each trade made on its app.
The stock market is throwing a global party
Spurred on by renewed optimism about the post-pandemic recovery and a strong fear of missing out, investors keep pushing stocks higher.
What’s happening: The Dow Jones Industrial Average closed above 34,000 for the first time on Thursday as Wall Street celebrated a strong start to corporate earnings season.
But US stocks aren’t the only ones getting love. MSCI’s broad gauge of global stocks, which covers 23 developed and 27 emerging markets, just hit an all-time high, too, while Europe’s Stoxx 600 index is on track for its seventh consecutive week of gains.