Robinhood Sees High Legal Burden for SEC on Broker-App Rules (1)

Robinhood Markets Inc. fired a warning shot to regulators, saying efforts to impose new rules on online brokerages’ engagement with customers would face a high legal burden and could ultimately be rejected by U.S. courts.

In a 27-page letter to the Securities and Exchange Commission, Robinhood laid out a number of arguments for why it will be hard to justify enhanced oversight. The SEC is examining whether notifications, lists of popular stocks and a variety of game-like features used by Robinhood and other brokerage apps are encouraging excessive trading that puts retail investors at risk.

“The bottom line is that ...