Robinhood went on to state in its blog that it “has helped bring millions more people into our financial system, and the Massachusetts Securities Division’s attempt to prevent Massachusetts residents from choosing how they invest is elitist and against everything we stand for. We don’t believe our customers are naïve as the Massachusetts Securities Division paints them to be.”
Robinhood told the court that it “should enjoin enforcement of the [Massachusetts] Secretary’s new rule and declare that it is contrary to state and federal law.”
As applied to Robinhood, Massachusetts’ fiduciary rule “is even more problematic,” the complaint states.
Massachusetts is trying to ban Robinhood from the state
Regulators say the company is targeting young, inexperienced investors. Image: KnowTechie
Super popular investing app Robinhood is having more legal problems in the state of Massachusetts. State regulators are looking to revoke the company’s broker-dealer license, an escalation of the battle that has been going on for months concerning the company’s marketing strategies.
The issues in Massachusetts all started a few months ago, with state regulators filing a 24-page complaint against the company. In the complaint, regulators claim that Robinhood maliciously targeted inexperienced traders using gimmicks like exploding confetti, which would make the app exciting to new, younger users. In the time since the original complaint was filed, the company said that they will be removing some of these features that may have made investing seem more like a game.
Massachusetts looks to bar Robinhood trading app in state; company sues
Updated 3:38 PM;
Today 3:38 PM
FILE - This Thursday, Dec. 17, 2020 photo shows the logo for the Robinhood app on a smartphone in New York. 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. (AP Photo/Patrick Sison)AP
Massachusetts looks to bar Robinhood in state; company sues
April 16, 2021
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FILE - This Thursday, Dec. 17, 2020 photo shows the logo for the Robinhood app on a smartphone in New York. 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.Patrick Sison/AP
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The Massachusetts Securities Division is seeking to revoke Robinhoodâs broker-dealer license to prevent it from doing business in the commonwealth after charging it for encouraging inexperienced investors to place unnecessarily risky trades, per a Thursday filing. Concurrently, Robinhood is suing to prevent the regulator from proceeding with its administrative complaint, arguing that the regulatorâs new fiduciary rule exceeds its authority under state and federal law.
Previously, the Massachusetts regulator sued Robinhood in an administrative case in December 2020 for targeting novice investors and exposing them to âunnecessary trading risksâ by allegedly violating state laws and regulations by failing to protect customers and safeguard its system. According to the Wall Street Journal, in an amended complaint, the regulator said that Robinhood has âcontinued a pattern of aggressively inducing and enticing trading among its c