Robinhood gets $30 million penalty for not complying with banking regulations

Robinhood gets $30 million penalty for not complying with banking regulations

New York State: The Department of Financial Services of New York State fined the $30 million online brokerage, Robinhood, for not complying with regulations governing money laundering and cybersecurity.

An investigation into Robinhood's operations from January 24th, 2019 to September 30th, 2019 found that the company had not been in compliance with banking regulations, according to the department.

As the business grew, Robinhood Crypto failed to invest the necessary resources and attention to maintain a culture of compliance, a failure that resulted in significant violations of the anti-money laundering and cybersecurity regulations, according to a news release by Adrienne A. Harris, superintendent of the department. The department said that despite its deficiencies in those areas, Robinhood Crypto was in compliance with transaction-monitoring and cybersecurity regulations.

The company didn't provide a dedicated phone number for consumer complaints on its website, but they stressed that besides the $30 million penalty, Robinhood must hire an independent consultant to evaluate its regulatory compliance.

Cheryl Crumpton, Associate General Counsel for Robinhood Markets Inc., said in a statement that the settlement, reached last year and previously disclosed in our public filings, is now final. We have made a lot of progress building industry-leading legal compliance and cybersecurity programs, and we will continue to prioritize this work to best serve our customers.