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| footnotes = <ref name=10K>{{Cite web | url=https://www.sec.gov/ix?doc=/Archives/edgar/data/1783879/000178387924000054/hood-20231231.htm |title=Robinhood Markets, Inc. 2023 Annual Report (Form 10-K) | date=February 27, 2024 | publisher=[[U.S. Securities and Exchange Commission]]}}</ref>
| footnotes = <ref name=10K>{{Cite web | url=https://www.sec.gov/ix?doc=/Archives/edgar/data/1783879/000178387924000054/hood-20231231.htm |title=Robinhood Markets, Inc. 2023 Annual Report (Form 10-K) | date=February 27, 2024 | publisher=[[U.S. Securities and Exchange Commission]]}}</ref>
}}
}}
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[[File:TechCrunch Disrupt NY 2016 - Day 2 (26841509412) (2).jpg|thumb|right|Co-founder of Robinhood [[Vladimir Tenev]] speaks onstage during [[TechCrunch Disrupt]] NY 2016 at the [[Brooklyn Cruise Terminal]] on May 10, 2016, in [[New York City]].]]
[[File:TechCrunch Disrupt San Francisco 2018 - day 2 (43802636014).jpg|thumb|right|Robinhood co-founder [[Baiju Bhatt]] (left) and moderator Josh Constine (right) speak onstage during Day 2 of [[TechCrunch Disrupt]] SF 2018 at the [[Moscone Center]] on September 6, 2018, in [[San Francisco, California]].]]


'''Robinhood Markets, Inc.''' is an American financial services company headquartered in [[Menlo Park, California]]. The company provides an [[electronic trading platform]] accessible via [[mobile app]] that facilitates [[commission (remuneration)|commission]]-free trades of [[stock]]s, [[exchange-traded fund]]s and [[cryptocurrency]], as well as [[cryptocurrency wallet]]s, [[credit card]]s and other banking services.<ref name=10K/> The company's revenue comes primarily from [[payment for order flow]] (53% of Q1 2024 revenues), net interest income (primarily from [[Margin (finance)|margin]] lending, interest earned on customers' cash balances, and credit cards; 41% of Q1 2024 revenues), and [[subscription fee]]s (6% of Q1 2024 revenues).<ref name=earnings/><ref name=10K/> The company has 23.9 million funded customers, 13.7 million monthly active users, and $130 billion in assets under custody.<ref name=earnings>{{Cite press release | url=https://www.globenewswire.com/en/news-release/2024/05/08/2878177/0/en/Robinhood-Reports-First-Quarter-2024-Results.html | title=Robinhood Reports First Quarter 2024 Results | publisher=[[Globe Newswire]] | date=May 8, 2024}}</ref>
'''Robinhood Markets, Inc.''' is an American financial services company headquartered in [[Menlo Park, California]]. The company provides an [[electronic trading platform]] accessible via [[mobile app]] that facilitates [[commission (remuneration)|commission]]-free trades of [[stock]]s, [[exchange-traded fund]]s and [[cryptocurrency]], as well as [[cryptocurrency wallet]]s, [[credit card]]s and other banking services.<ref name=10K/> The company's revenue comes primarily from [[payment for order flow]] (53% of Q1 2024 revenues), net interest income (primarily from [[Margin (finance)|margin]] lending, interest earned on customers' cash balances, and credit cards; 41% of Q1 2024 revenues), and [[subscription fee]]s (6% of Q1 2024 revenues).<ref name=earnings/><ref name=10K/> The company has 23.9 million funded customers, 13.7 million monthly active users, and $130 billion in assets under custody.<ref name=earnings>{{Cite press release | url=https://www.globenewswire.com/en/news-release/2024/05/08/2878177/0/en/Robinhood-Reports-First-Quarter-2024-Results.html | title=Robinhood Reports First Quarter 2024 Results | publisher=[[Globe Newswire]] | date=May 8, 2024}}</ref>
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[[File:TechCrunch Disrupt NY 2016 - Day 2 (26841509412) (2).jpg|thumb|right|Co-founder of Robinhood [[Vladimir Tenev]] speaks onstage during [[TechCrunch Disrupt]] NY 2016 at Brooklyn Cruise Terminal on May 10, 2016, in New York City.]]
[[File:TechCrunch Disrupt NY 2016 - Day 2 (26841509412) (2).jpg|thumb|right|Co-founder of Robinhood [[Vladimir Tenev]] speaks onstage during [[TechCrunch Disrupt]] NY 2016 at Brooklyn Cruise Terminal on May 10, 2016, in New York City.]]
Robinhood was founded in April 2013 by [[Vladimir Tenev]] and [[Baiju Bhatt]], who had previously built [[high-frequency trading]] platforms for financial institutions in New York City.<ref name=forget/><ref name="mainst">{{Cite web |last=Carney |first=Michael |date=December 28, 2013 |title=Robinhood gets $3M to take from Wall St. and give to Main St. with its mobile-first, zero-commission brokerage |url=http://pando.com/2013/12/18/robinhood-gets-3m-to-take-from-wall-street-and-give-to-main-street-with-its-mobile-first-zero-commission-brokerage/ |url-status=live |archive-url=https://web.archive.org/web/20140513005945/http://pando.com/2013/12/18/robinhood-gets-3m-to-take-from-wall-street-and-give-to-main-street-with-its-mobile-first-zero-commission-brokerage/ |archive-date=May 13, 2014 |access-date=May 7, 2014 |website=[[PandoDaily]]}}</ref> The company's name comes from its mission to "provide everyone with access to the financial markets, not just the wealthy". Tenev noted that executing a trade costs brokerages "fractions of a penny" but they typically charged fees of $5 to $10 per trade, as well as required account minimums of $500 to $5,000.<ref name="forbes">{{Cite web |last=Touryalai |first=Halah |title=Forget $10 Trades, Meet Robinhood: New Brokerage Targets Millennials With Little Cash |url=https://www.forbes.com/sites/halahtouryalai/2014/02/26/forget-10-trades-meet-robinhood-new-brokerage-targets-millennials-with-little-cash/ |url-status=live |archive-url=https://web.archive.org/web/20190806183122/https://www.forbes.com/sites/halahtouryalai/2014/02/26/forget-10-trades-meet-robinhood-new-brokerage-targets-millennials-with-little-cash/ |archive-date=August 6, 2019 |access-date=November 9, 2019 |website=[[Forbes]] |language=en}}</ref><ref>{{Cite web |title=Our Story |url=https://robinhood.com/support/articles/360001213043/our-story/ |url-status=live |archive-url=https://web.archive.org/web/20191109091452/https://robinhood.com/support/articles/360001213043/our-story/ |archive-date=November 9, 2019 |access-date=November 9, 2019 |website=Robinhood |language=en-US}}</ref>
Robinhood was founded in April 2013 by [[Vladimir Tenev]] and [[Baiju Bhatt]], who had previously built [[high-frequency trading]] platforms for financial institutions in New York City.<ref name=forget/><ref name="mainst">{{Cite web |last=Carney |first=Michael |date=December 28, 2013 |title=Robinhood gets $3M to take from Wall St. and give to Main St. with its mobile-first, zero-commission brokerage |url=http://pando.com/2013/12/18/robinhood-gets-3m-to-take-from-wall-street-and-give-to-main-street-with-its-mobile-first-zero-commission-brokerage/ |url-status=live |archive-url=https://web.archive.org/web/20140513005945/http://pando.com/2013/12/18/robinhood-gets-3m-to-take-from-wall-street-and-give-to-main-street-with-its-mobile-first-zero-commission-brokerage/ |archive-date=May 13, 2014 |access-date=May 7, 2014 |website=[[PandoDaily]]}}</ref> The company's name comes from its mission to "provide everyone with access to the financial markets, not just the wealthy". Tenev noted that executing a trade costs brokerages "fractions of a penny" but they typically charged fees of $5 to $10 per trade, as well as required account minimums of $500 to $5,000.<ref name="forbes">{{Cite web |last=Touryalai |first=Halah |title=Forget $10 Trades, Meet Robinhood: New Brokerage Targets Millennials With Little Cash |url=https://www.forbes.com/sites/halahtouryalai/2014/02/26/forget-10-trades-meet-robinhood-new-brokerage-targets-millennials-with-little-cash/ |url-status=live |archive-url=https://web.archive.org/web/20190806183122/https://www.forbes.com/sites/halahtouryalai/2014/02/26/forget-10-trades-meet-robinhood-new-brokerage-targets-millennials-with-little-cash/ |archive-date=August 6, 2019 |access-date=November 9, 2019 |website=[[Forbes]] |language=en}}</ref><ref>{{Cite web |title=Our Story |url=https://robinhood.com/support/articles/360001213043/our-story/ |url-status=live |archive-url=https://web.archive.org/web/20191109091452/https://robinhood.com/support/articles/360001213043/our-story/ |archive-date=November 9, 2019 |access-date=November 9, 2019 |website=Robinhood |language=en-US}}</ref>

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[[File:TechCrunch Disrupt San Francisco 2018 - day 2 (43802636014).jpg|thumb|right|Robinhood co-founder [[Baiju Bhatt]] (left) and moderator Josh Constine (right) speak onstage during Day 2 of [[TechCrunch Disrupt]] SF 2018 at the [[Moscone Center]] on September 6, 2018, in [[San Francisco, California]].]]


The firm showcased its app publicly for the first time at [[LA Hacks]], first published it on AppStore in December 2014 and then officially launched the app in March 2015.<ref>{{Cite web |last=Long |first=Heather |date=March 12, 2015 |title=New Robinhood app offers free trading. Millennials jump in |url=https://money.cnn.com/2015/03/12/investing/robinhood-app-free-trading-millennials/index.html |url-status=live |archive-url=https://web.archive.org/web/20190717221609/https://money.cnn.com/2015/03/12/investing/robinhood-app-free-trading-millennials/index.html |archive-date=July 17, 2019 |access-date=July 17, 2019 |website=CNNMoney}}</ref>
The firm showcased its app publicly for the first time at [[LA Hacks]], first published it on AppStore in December 2014 and then officially launched the app in March 2015.<ref>{{Cite web |last=Long |first=Heather |date=March 12, 2015 |title=New Robinhood app offers free trading. Millennials jump in |url=https://money.cnn.com/2015/03/12/investing/robinhood-app-free-trading-millennials/index.html |url-status=live |archive-url=https://web.archive.org/web/20190717221609/https://money.cnn.com/2015/03/12/investing/robinhood-app-free-trading-millennials/index.html |archive-date=July 17, 2019 |access-date=July 17, 2019 |website=CNNMoney}}</ref>
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In April 2017, Robinhood raised $110&nbsp;million at a $1.3&nbsp;billion valuation led by [[Yuri Milner]] of [[Mail.ru Group|DST Global]], Greenoaks Capital, and [[Thrive Capital]].<ref>{{Cite news |last=Irrera |first=Anna |date=April 26, 2017 |title=Trading startup Robinhood raises $110 million in new funding round |work=[[Reuters]] |url=https://www.reuters.com/article/us-robinhood-investment/trading-startup-robinhood-raises-110-million-in-new-funding-round-idUSKBN17S1WV |url-status=live |access-date=August 27, 2018 |archive-url=https://web.archive.org/web/20180828001809/https://www.reuters.com/article/us-robinhood-investment/trading-startup-robinhood-raises-110-million-in-new-funding-round-idUSKBN17S1WV |archive-date=August 28, 2018}}</ref><ref>{{Cite news |last=McBride |first=Sarah |date=April 26, 2017 |title=Robinhood's Stock Trading App Is Valued at $1.3 Billion |work=[[Bloomberg News]] |url=https://www.bloomberg.com/news/articles/2017-04-26/robinhood-s-stock-trading-app-is-valued-at-1-3-billion |url-status=live |url-access=subscription |access-date=May 14, 2017 |archive-url=https://web.archive.org/web/20170514021529/https://www.bloomberg.com/news/articles/2017-04-26/robinhood-s-stock-trading-app-is-valued-at-1-3-billion |archive-date=May 14, 2017}}</ref>
In April 2017, Robinhood raised $110&nbsp;million at a $1.3&nbsp;billion valuation led by [[Yuri Milner]] of [[Mail.ru Group|DST Global]], Greenoaks Capital, and [[Thrive Capital]].<ref>{{Cite news |last=Irrera |first=Anna |date=April 26, 2017 |title=Trading startup Robinhood raises $110 million in new funding round |work=[[Reuters]] |url=https://www.reuters.com/article/us-robinhood-investment/trading-startup-robinhood-raises-110-million-in-new-funding-round-idUSKBN17S1WV |url-status=live |access-date=August 27, 2018 |archive-url=https://web.archive.org/web/20180828001809/https://www.reuters.com/article/us-robinhood-investment/trading-startup-robinhood-raises-110-million-in-new-funding-round-idUSKBN17S1WV |archive-date=August 28, 2018}}</ref><ref>{{Cite news |last=McBride |first=Sarah |date=April 26, 2017 |title=Robinhood's Stock Trading App Is Valued at $1.3 Billion |work=[[Bloomberg News]] |url=https://www.bloomberg.com/news/articles/2017-04-26/robinhood-s-stock-trading-app-is-valued-at-1-3-billion |url-status=live |url-access=subscription |access-date=May 14, 2017 |archive-url=https://web.archive.org/web/20170514021529/https://www.bloomberg.com/news/articles/2017-04-26/robinhood-s-stock-trading-app-is-valued-at-1-3-billion |archive-date=May 14, 2017}}</ref>

[[File:TechCrunch Disrupt San Francisco 2018 - day 2 (43802636014).jpg|thumb|right|Robinhood co-founder [[Baiju Bhatt]] (left) and moderator Josh Constine (right) speak onstage during Day 2 of TechCrunch Disrupt SF 2018 at Moscone Center on September 6, 2018, in San Francisco, California.]]
On May 10, 2018, Robinhood closed a $363&nbsp;million Series D financing round led by [[DST Global]].<ref name=":0">{{Cite web |last=Lynley |first=Matthew |date=May 10, 2018 |title=Free stock trading app Robinhood rockets to a $5.6B valuation with new funding round |url=http://social.techcrunch.com/2018/05/10/robinhood-rockets-to-a-5-6b-valuation-with-a-massive-new-funding-round/ |url-status=live |archive-url=https://web.archive.org/web/20190411211646/https://techcrunch.com/2018/05/10/robinhood-rockets-to-a-5-6b-valuation-with-a-massive-new-funding-round/ |archive-date=April 11, 2019 |access-date=April 24, 2019 |website=[[TechCrunch]]}}</ref> {{As of|2018|May|df=}}, Robinhood raised a total of $539&nbsp;million in venture capital funding, with the last valuation at $5.6&nbsp;billion, up from their previous valuation of $1.3&nbsp;billion.<ref name=":0" />
On May 10, 2018, Robinhood closed a $363&nbsp;million Series D financing round led by [[DST Global]].<ref name=":0">{{Cite web |last=Lynley |first=Matthew |date=May 10, 2018 |title=Free stock trading app Robinhood rockets to a $5.6B valuation with new funding round |url=http://social.techcrunch.com/2018/05/10/robinhood-rockets-to-a-5-6b-valuation-with-a-massive-new-funding-round/ |url-status=live |archive-url=https://web.archive.org/web/20190411211646/https://techcrunch.com/2018/05/10/robinhood-rockets-to-a-5-6b-valuation-with-a-massive-new-funding-round/ |archive-date=April 11, 2019 |access-date=April 24, 2019 |website=[[TechCrunch]]}}</ref> {{As of|2018|May|df=}}, Robinhood raised a total of $539&nbsp;million in venture capital funding, with the last valuation at $5.6&nbsp;billion, up from their previous valuation of $1.3&nbsp;billion.<ref name=":0" />


Revision as of 04:00, 26 August 2024

Robinhood Markets, Inc.
Company typePublic
IndustryFinancial services
FoundedApril 18, 2013; 11 years ago (2013-04-18)
Founders
Headquarters
Menlo Park, California
,
U.S.
Area served
  • United States
  • United Kingdom
Key people
Vladimir Tenev (CEO)
Services
RevenueIncrease US$1.865 billion (2023)
Negative increase US$−536 million (2023)
Negative increase US$−541 million (2023)
Total assetsIncrease US$32.33 billion (2023)
Total equityDecrease US$6.696 billion (2023)
Owners
Number of employees
c. 2,200 (2023)
Websiterobinhood.com
Footnotes / references
[1]

Robinhood Markets, Inc. is an American financial services company headquartered in Menlo Park, California. The company provides an electronic trading platform accessible via mobile app that facilitates commission-free trades of stocks, exchange-traded funds and cryptocurrency, as well as cryptocurrency wallets, credit cards and other banking services.[1] The company's revenue comes primarily from payment for order flow (53% of Q1 2024 revenues), net interest income (primarily from margin lending, interest earned on customers' cash balances, and credit cards; 41% of Q1 2024 revenues), and subscription fees (6% of Q1 2024 revenues).[2][1] The company has 23.9 million funded customers, 13.7 million monthly active users, and $130 billion in assets under custody.[2]

The company is named after Robin Hood, based on its mission to "provide everyone with access to the financial markets, not just the wealthy", with no commissions or minimum account balances.[3][4] The company has been credited for forcing the elimination of trading fees by several stockbrokers.[5][6][7][8] Robinhood has targeted millennials as customers; in 2022, the average age of its customers was 32.[9]

As the majority of the company's revenues are from payment for order flow, described as a kickback, the company has been criticized for routing orders to market makers that pay the most instead of those that offer the best order execution. It has also been criticized for undisclosed markups on cryptocurrency transactions.[10]

History

Co-founder of Robinhood Vladimir Tenev speaks onstage during TechCrunch Disrupt NY 2016 at Brooklyn Cruise Terminal on May 10, 2016, in New York City.

Robinhood was founded in April 2013 by Vladimir Tenev and Baiju Bhatt, who had previously built high-frequency trading platforms for financial institutions in New York City.[3][11] The company's name comes from its mission to "provide everyone with access to the financial markets, not just the wealthy". Tenev noted that executing a trade costs brokerages "fractions of a penny" but they typically charged fees of $5 to $10 per trade, as well as required account minimums of $500 to $5,000.[12][13]

Robinhood co-founder Baiju Bhatt (left) and moderator Josh Constine (right) speak onstage during Day 2 of TechCrunch Disrupt SF 2018 at the Moscone Center on September 6, 2018, in San Francisco, California.

The firm showcased its app publicly for the first time at LA Hacks, first published it on AppStore in December 2014 and then officially launched the app in March 2015.[14]

As of January 2015, 80% of the firm's customers belonged to the "Millennial" demographic and the average customer age was 26.[15] Fifty percent of users who have made a trade use the app daily and 90% use the app weekly.[16] As of 2022, Robinhood had 22.8 million funded accounts and 15.9 million monthly active users.[17]

In April 2017, Robinhood raised $110 million at a $1.3 billion valuation led by Yuri Milner of DST Global, Greenoaks Capital, and Thrive Capital.[18][19]

On May 10, 2018, Robinhood closed a $363 million Series D financing round led by DST Global.[20] As of May 2018, Robinhood raised a total of $539 million in venture capital funding, with the last valuation at $5.6 billion, up from their previous valuation of $1.3 billion.[20]

In February 2018, the company announced that it would be moving its headquarters from Palo Alto to the former headquarters of Sunset magazine in Menlo Park.[21]

In May 2019, reports from Bloomberg and other outlets publicized Robinhood's pursuit of an additional $200 million in funding, which could value the company in the $7 billion to $10 billion range.[22][20] In November 2019, Robinhood announced its expansion to the United Kingdom.[23]

During the 2020 stock market crash, Robinhood trading increased.[24] The subsequent market rise was partially attributed to Robinhood traders, but a study indicated that Robinhood traders had little daily impact on major shares.[25]

In May 2020, it was announced that Robinhood had raised $280 million in venture funding at a pre-money valuation of $8.3 billion led by Sequoia Capital, and 3 months later, the company announced a $200 million Series G funding round from a new investor, D1 Capital Partners, on August 17.[26][27]

In late June 2021, Robinhood was fined $57 million by the FINRA and was ordered to pay $13 million in restitution to clients affected by outages and misleading communications in March 2020. This was the largest-ever FINRA penalty in the history of the organization.[28]

The company went public on the Nasdaq on July 29, 2021, under the stock ticker HOOD. The opening price was $38, but dropped shortly afterwards to a low of $33.35 before starting to recover,[29][30] reaching an all-time high at $85. Subsequently, it fell again after facing growing regulatory uncertainty, Q3 earnings, and disclosing a security breach.[31]

In 2022 Robinhood shrunk staffing levels, which gained widespread media attention. The first wave of layoffs occurred in April, with the company cutting its workforce by 9%. More significant were Robinhood's layoff announcement released simultaneously with its 2022 Q2 earnings on August 2, in which Tenev announced the company would layoff 23% of its workforce, mostly in operations, marketing and program management. From January to August 2022, Robinhood's stock shed 48% of its value.[32]

In August 2022, Robinhood's cryptocurrency division was fined $30 million by the New York State Department of Financial Services for allegedly violating anti-money-laundering and cybersecurity regulations, in the department's first crypto enforcement action.[33]

In May 2022 Alameda Research disclosed a 7.6% share in Robinhood. According to anonymous sources cited by Reuters in November 2022, Alameda used Robinhood shares as part of its collateral for a transfer of at least $4 billion from FTX.[34] Regulators seized the shares during the bankruptcy of FTX, which Robinhood bought back for $10.96 each (at a total cost of $605.7 million).[35][36]

In December 2022 Robinhood launched Individual Retirement Accounts (IRAs), including a 1% match.[37] In April 2023 Robinhood launched Robinhood Connect, creating an integrated on-ramp to crypto wallets.[38]

On 1 May 2023, Robinhood added a bankruptcy tag to AMC stock for three minutes.[39] AMC chairman and CEO Adam Aron said he was considering suing Robinhood for its "incomprehensible incompetence".[40]

On 22 June 2023, Robinhood announced it had agreed to buy X1, a credit card issuance startup that offers a no-fee, income-based credit card with rewards, for $95 million. On completion of the acquisition, X1's co-founders Siddharth Batra and Deepak Rao would oversee Robinhood's new credit card business.[41][42] Later that month, Robinhood announced a further round of layoffs, letting go around 150 employees or about 7% of its staff.[43]

In March 2024, Robinhood was launched in the United Kingdom.[44]

Products

Stock and ETF trading

Robinhood's first product was commission-free trades of stocks and exchange-traded funds.

The company added functionality including instant deposits in February 2016,[45][46] margin trading and market analytics via a subscription business model called Robinhood Gold in September 2016,[47] options trading in December 2017,[48][49] trading in american depositary receipts in August 2018,[50] support for purchasing fractional shares and dividend reinvestment plans in December 2019,[51][52] systematic investment plans in May 2020,[53] access to initial public offering (IPO) shares in May 2021,[54] extended-hours trading in March 2022,[55] securities lending in May 2022,[56] and individual retirement accounts in January 2023.[57][58][59][60]

Cryptocurrency trading

In February 2018, after amassing a waitlist of over 2 million customers, Robinhood launched commission-free cryptocurrency trading of Bitcoin and Ethereum in several states; availability was expanded later that year. By 2021, cryptocurrency trading was available in every U.S. state except Hawaii and Nevada.[61][62][63][64]

By 2021, the company added trading for Bitcoin Cash, Dogecoin, Ethereum Classic, and Litecoin.[65] In September 2021, automatic recurring investments in cryptocurrency was introduced.[66][67]

In April 2022, after amassing a waitlist of over 2 million customers, Robinhood issued cryptocurrency wallets to those on the waitlist, and added trading for Shiba Inu, Solana, Compound, Chainlink and Polygon.[68][69]

Also in April 2022, the company announced integration of Bitcoin's Lightning Network to enable faster transactions involving the cryptocurrency.[70]

In April 2023, Robinhood launched Robinhood Connect, allowing users to trade cryptocurrency using other cryptocurrency wallets.[71]

In June 2023, Robinhood delisted Solana, Cardano and Polygon after the U.S. Securities and Exchange Commission determined that they are unregistered securities and subject to additional regulations.[72][73]

In December 2023, Robinhood expanded its cryptocurrency trading to the European Union.[74][75][76][77]

Robinhood received a Wells notice from the U.S. Securities and Exchange Commission in May 2024 alleging that the company had violated securities laws over crypto tokens traded on its platform; Robinhood countered that cryptocurrencies are not securities and are not covered by securities laws.[78]

Banking

In December 2018, Robinhood launched a waitlist to sign up for new transaction accounts and savings accounts, including debit cards, with market-leading interest rates, which it claimed would be insured by the Securities Investor Protection Corporation (SIPC). However, after the SIPC said that it had not been contacted by Robinhood and that the accounts would not be insured, the company was forced to suspend sign-ups for the new accounts.[79][80][81]

The accounts were finally launched with insurance from the Federal Deposit Insurance Corporation in December 2019.[82][83] In March 2022, Robinhood launched the Robinhood Cash Card, a debit card that allows users to round up purchases and automatically invest the additional amount in stocks and cryptocurrency.[84]

Controversies

Payment for order flow

Bloomberg News reported in October 2018 that Robinhood had received almost half of its revenue from payment for order flow.[85] The company later confirmed this on its corporate website when asked by CNBC.[86] The Wall Street Journal found that Robinhood "appears to be taking more cash for orders than rivals," by up to a 60-to-1 ratio, according to its regulatory filings.[87]

The Financial Industry Regulatory Authority fined Robinhood $1.25 million in December 2019 for failing to ensure that its customers received the best price for orders. All of Robinhood's trades between October 2016 and November 2017 were routed to companies that paid for order flow, and the company did not consider the price improvement which may have been obtained through other market makers.[88] Robinhood was sued in a class-action law suit in December 2020 for failing to disclose that a large portion of its revenue relied on payment for order flow.[89]

On September 2, 2020, the Wall Street Journal reported that Robinhood was under SEC investigation for failing to fully disclose selling clients' orders to high-speed trading firms, with a potential $10 million-plus fine.[90] Robinhood paid $65 million to settle the SEC investigation on December 17, 2020.[91]

Security breaches

In July 2019, Robinhood admitted to storing some customer passwords in cleartext in their internal systems, according to emails it sent to the affected customers. Robinhood declined to say how many customers were affected by the error and claims that it did not find any evidence of abuse.[92] In 2020, the firm found that almost 2,000 Robinhood Markets accounts were compromised and that the hackers had siphoned off customer funds.[93]

In early November 2021 the company announced that about 5 million customers had their email addresses stolen by hackers via a voice phishing scheme. Another 2 million customers's full names were also taken. Three hundred customers had more extensive personal information taken.[94] It is believed that Conor Brian Fitzpatrick, owner of BreachForums, who was behind the 2021 FBI email hack and was arrested by law enforcement in March 2023, was responsible for the breach.[95][96]

Infinite leverage

In November 2019, a user on the WallStreetBets subreddit shared a glitch that allowed Robinhood Gold users to borrow unlimited funds via selling covered calls where the shares had been bought using leverage, and the premium from the call was used to access additional leverage to buy more shares in order to sell more calls and so on. The loophole was closed shortly thereafter and the accounts that exploited it were suspended, but not before some accounts recorded six figure losses by using what WallStreetBets users dubbed the "infinite money cheat code."[97][98][99]

Outages

On Monday, March 2, 2020, Robinhood suffered a systemwide, all-day outage during the largest daily point gain in the Dow Jones' history, preventing users from performing most actions on the platform, including opening and closing positions.[100] During this outage the S&P 500 climbed more than 4.6 percent.[101] Robinhood users postulated that the outage was the result of a coding error regarding leap year handling for Saturday, February 29, 2020. Robinhood denied these claims.[102] Robinhood said that they will offer compensation on a case-by-case basis.[103] Robinhood experienced another major systemwide outage on March 9.[104] Robinhood is currently facing three lawsuits due to outages in March 2020.[105]

Suicide of Alexander E. Kearns

"Alex Kearns" redirects here. For the photographer, see Alex Cearns.

Robinhood faced controversy in June 2020 after University of Nebraska student Alexander E. Kearns committed suicide after seeing a negative cash balance of US$730,000 (equivalent to $859,442 in 2023) in his Robinhood margin trading account. It was later discovered that this was a temporary[clarification needed] negative balance due to unsettled trading activity.[106][107] In his suicide note, Kearns, who was 20 years old at the time of his death, accused Robinhood of allowing him to pile on too much risk.[108] In a press release, Robinhood promised considering additional criteria and education for customers seeking level 3[clarification needed] options authorization.[109][110][111] Kearns' family filed and later settled a wrongful death lawsuit with the company.[112]

Gamification in Massachusetts

On December 16, 2020, the Securities Division of the Massachusetts Secretary of the Commonwealth filed an administrative complaint alleging violation of state securities laws by "marketing itself to Massachusetts investors without regard for the best interests of its customers and failing to maintain the infrastructures and procedures necessary to meet the demands of its rapidly growing customer base."[113] As a result of their gamified interface, the Massachusetts Securities Division contended that Robinhood exploits novice investors.[114] In March 2022, Suffolk County Superior Court declared that the new fiduciary duty rule underlying parts of the case was invalid. The decision did not negate all enforcement action from state regulators, which could still pursue some claims against the company.[115]

2021 short squeeze

Main article: GameStop short squeeze

On January 28, 2021, Robinhood and other retail brokers, including Webull,[116] restricted the trading of certain stocks following an effort by users of the r/wallstreetbets subreddit to drive up their price.[117] Robinhood restricted trading in these stocks in order to meet collateral requirements at their clearinghouse, the National Securities Clearing Corporation.[118][119] This decision attracted condemnation from internet users on the subreddit and on Twitter,[120][121] as well as politicians.[122][123][124] The House Committee on Financial Services questioned Robinhood CEO Vlad Tenev during a hearing on February 18, 2021.[125]

Following the controversy, the app suffered an influx of one-star reviews on the Google Play app store.[126] Google deleted at least 100,000 such reviews, calling them "coordinated or inorganic".[127][128][129] However, after another round of negative reviews on the app dropping it to a 1.1-star rating, Google confirmed that the new reviews do not violate Google policies and will not be removed.[130] Protesters also showed up outside Robinhood headquarters in Menlo Park, California, at the Securities and Exchange Commission headquarters in Washington, D.C., and the New York Stock Exchange.[131]

On January 28, 2021, a class-action lawsuit against Robinhood for alleged market manipulation was filed in the Southern District of New York. The lawsuit alleged that the app “purposefully, willfully, and knowingly removing the stock ‘GME’ from its trading platform in the midst of an unprecedented stock rise [...] deprived retail investors of the ability to invest in the open-market and manipulating the open-market.”[132][133] Later that day, the company announced that it would reallow limited buys of the stocks on January 29.[134] The case was dismissed by the Miami federal court that November, on the grounds that the plaintiffs fell short of providing direct evidence of an antitrust conspiracy.[135]

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