Robinhood Discloses SEC Probe on Short Selling Rules Compliance

Robinhood Discloses SEC Probe on Short Selling Rules Compliance
The Robinhood logo on a phone in San Anselmo, Calif., on Dec. 17, 2020. (Justin Sullivan/Getty Images)

Robinhood Markets Inc. disclosed in a filing that the U.S. Securities and Exchange Commission has been probing the company’s compliance with short selling rules since October 2021.

Robinhood said it received additional requests from the SEC in Q2 for information related to the company’s compliance with trade reporting requirements concerning securities and fractional share lending.

The online brokerage firm has faced several regulatory actions in recent years.

Earlier this week, Robinhood’s cryptocurrency arm was fined $30 million by the New York State Department of Financial Services, accusing the firm of violating anti-money-laundering and cybersecurity rules.

In 2020, the SEC fined Robinhood $65 million for misleading its customers about a key source of revenue, called payment for order flow. The firm didn’t admit or deny wrongdoing in that case.

By Vandana Singh
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