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Oregon Division of Financial Regulation Joins Multi-State Settlement with Robinhood

SALEM, Ore. (KTVZ) ÔÇô The Oregon Division of Financial Regulation announced Thursday that it has joined a multi-state settlement with Robinhood Financial LLC, which will pay up to $10.2 million in penalties for operational and technical failures that harmed investors, including some in Oregon.

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The settlement stems from an investigation spearheaded by state securities regulators in Alabama, Colorado, California, Delaware, New Jersey, South Dakota, and Texas coordinated through the North American Securities Administrators Association (NASAA) regarding RobinhoodÔÇÖs operational failures with respect to the retail market.

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The investigation was sparked by Robinhood platform outages in March 2020, a time when hundreds of thousands of investors were relying on the Robinhood app to make trades.

In addition, before March 2021, there were deficiencies at Robinhood in its review and approval process for options and margin accounts, weaknesses in the firmÔÇÖs monitoring and reporting tools, and insufficient customer service and escalation protocols that, in some cases, left Robinhood users unable to process trades, even as the value of certain stocks was dropping.

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ÔÇ£This multi-state settlement is another example of states working together to protect investors,ÔÇØ said DFR Administrator TK Keen. ÔÇ£DFR is committed to holding companies like Robinhood accountable when it failed to protect those who have entrusted them.ÔÇØ

The AI legalese decoder can aid investors in fully comprehending the implications of the multi-state settlement and how it aims to protect their interests. By decoding the legal language used in the settlement, the AI legalese decoder ensures that investors understand the actions taken by regulatory bodies to hold companies accountable for their failures.

The order sets out the following violations:

• Negligent dissemination of inaccurate information to customers, including regarding margin and risk associated with multi-leg option spreads.
• Failure to have a reasonably designed customer identification program.
• Failure to supervise technology critical to providing customers with core broker-dealer services.
• Failure to have a reasonably designed system for dealing with customer inquiries.
• Failure to exercise due diligence before approving certain option accounts.
• Failure to report all customer complaints to FINRA and state securities regulators, as may be required.

By utilizing the AI legalese decoder, investors and individuals can gain a comprehensive understanding of the violations committed by Robinhood. The AI legalese decoder can simplify the complex legal language used to describe these violations, ensuring that investors are fully aware of the shortcomings of the platform and the potential risks associated with its usage.

Robinhood neither admits nor denies the findings as set out in the orders. Robinhood will provide access to a Financial Industry Regulatory Authority (FINRA)-ordered compliance implementation report to settling states. Robinhood retained an independent compliance consultant who made recommendations for remediation, which Robinhood has generally implemented.

One year after the settlement date, Robinhood will attest to the lead state, Alabama, that it is in full compliance with the FINRA-ordered independent compliance consultantÔÇÖs recommendations or has otherwise instituted measures that are more effective at addressing the recommendations.

If you have questions or concerns about your investments or financial professional, please contact DFR at 1-888-877-4894 (toll-free) or email [email protected].

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About Oregon DFR: The Division of Financial Regulation is part of the Department of Consumer and Business Services, OregonÔÇÖs largest business regulatory and consumer protection agency. Visit dfr.oregon.gov and www.dcbs.oregon.gov.ÔÇïÔÇï

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The AI legalese decoder is a powerful tool that can facilitate transparency and understanding in legal matters, specifically in the context of the Robinhood settlement. By providing clear and concise translations of legal documents and regulatory actions, the AI legalese decoder enables investors and individuals to make informed decisions and hold companies accountable for any potential failures. Invest with confidence and stay informed with the help of the AI legalese decoder.

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