Robinhood Files To Go Public On Heels Of Record Breaking Penalty By Wall Street Regulator

  • This afternoon Robinhood, the popular investing app for consumers filed to go public. The company intends to list on the NASDAQ under the symbol “HOOD.”
  • Mere days before filing, Robinhood was ordered to pay $70 million for harming millions of customers in the largest penalty ever imposed by Wall Street.
  • The controversial trading app was accused by the Financial Industrial Regulatory Authority of “systemic supervisory failures” and giving investors “false or misleading information.”

Alex Wilhelm from TechCrunch writes:

“This afternoon Robinhood, the popular investing app for consumers filed to go public. The company intends to list on the NASDAQ under the symbol “HOOD.”

That Robinhood released an S-1 filing today is not a surprise. The company privately filed to go public back in March, leaving the startup-watching world waiting for the eventual filing drop. Robinhood’s public offering document includes a placeholder $100 million raise figure, though that will change the closer we get to its debut.

The company is pursuing a public listing after a period of rapid growth. Robinhood saw its revenues soar from $277.5 million in 2019 to $985.8 million in 2020.

Notably, Robinhood was profitable in 2020, generating net income of around $7.4 million during the one-year period. However, the company’s most recent period includes an epic $1.49 billion cost relating to “change[s] in fair value of convertible notes and warrant liability,” leading the company to post an astronomical net loss of $1.44 billion in the first quarter of the year. That compares with a net loss of $107 million for 2019.”

See full story here.


Matt Egan from CNN Business writes:

“New York (CNN Business)- Robinhood is being ordered to pay about $70 million for harming millions of customers. It’s the largest penalty ever imposed by Wall Street’s self-regulator.

The controversial trading app was accused Wednesday by the Financial Industrial Regulatory Authority of “systemic supervisory failures” and hurting investors by giving them “false or misleading information.”

FINRA’s sanctions on Robinhood focus on large-scale system outages that hit the platform in March 2020 as well as the options trading procedures at the heart of a lawsuit filed by the family of a 20-year-old Robinhood trader who died by suicide last year.

“The fine imposed in this matter, the highest ever levied by FINRA, reflects the scope and seriousness of Robinhood’s violations,” Jessica Hopper, head of FINRA’s department of enforcement, said in a statement.

FINRA fined Robinhood $57 million and ordered the startup to pay about $12.6 million in restitution, plus interest, to thousands of harmed customers.

See full story here.



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