Robinhood’s Luster Stained Again With a Record $70 Million Fine

Robinhood Markets Inc. unleashed a revolution, marshaling throngs of new traders to financial markets in an upside-down year.

But the free trading app’s breakneck growth hurt the same small-time investors it sought to empower.

That’s the accusation leveled by Wall Street’s self-funded watchdog, which extracted almost $70 million from the brokerage in a record settlement Wednesday, including a $57 million fine and about $12.6 million in payments to aggrieved customers. It follows Robinhood’s meteoric rise against the backdrop of the Covid-19 pandemic and the frenzy over hot stocks such as GameStop Corp. that warped the realm of retail trading.

LISTEN: Bloomberg Reporter Annie Massa discusses Robinhood being hit with a record $70 million fine. She speaks with Doug Krizner and Rishaad Salamat on Bloomberg Radio.