Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Robinhood Is In Talks With FINRA To Settle March 2020 Probe Into Options And Outages

Courtesy of ZeroHedge

Robinhood is reportedly in talks with Financial Industry Regulatory Authority to settle a March 2020 investigation that has been ongoing into the company. The probe is regarding app outages and option trading, Bloomberg reported on Friday.

At the center of the investigation was how Robinhood displays cash balances and buying power to its customers and the process that it undertakes to vet and approve traders for options trading. 

Robinhood noted the talks in a filing made on Friday, stating: “We have accrued in our statement of financial condition for the year ended December 31, 2020 of $26.6 million representing the bottom of the range of our probable losses. We cannot predict, however, whether these discussions will result in a resolution of these matters.”

The same filings show that the company had $154.2 million in net capital, Bloomberg reported.

And while fending off FINRA with one hand, Robinhood was also fighting a war of words against Charlie Munger with the other. We reported this morning that in an exclusive interview with the Wall Street Journal, the 97 year old Vice Chairman of Berkshire Hathaway sounded off about the "wild speculation" created by the budding brokerage.

“I hate this luring of people into engaging in speculative orgies. [Robinhood] may call it investing, but that’s all bullshit,” Munger said on Thursday. 

“It’s really just wild speculation, like casino gambling or racetrack betting. There’s a long history of destructive capitalism, these trading orgies whooped up by the people who profit from them.”

His comments on Thursday came after statements he made on Wednesday at the annual meeting of Daily Journal Corp., when he said “it’s really stupid to have a culture which encourages as much gambling in stocks.”

He said at the meeting: “You should try and make your money in this world by selling other people things that are good for them.”

And with one FINRA investigation off the plate, hopefully financial regulators will have plenty of time to look into Vlad Tenev's non-liquidity-related liquidity issues that emerged weeks ago as a result of the chaotic trading in GameStop. 

After weeks of doubling down on his early insistence that Robinhood wasn't suffering from a "liquidity issue", Tenev finally explained days ago to Barstool Sports' Dave Portnoy that "the 'L' word is a big thing in financial services: "A 'liquidity issue' means you can't meet your deposit requirements, you can't meet your margin requirements and are basically dead," he said.


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!





You must be logged in to make a comment.
You can sign up for a membership or get a FREE Daily News membership or log in

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!