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Robinhood Markets has agreed to pay $45 million to resolve charges brought by the U.S. Securities and Exchange Commission (SEC) related to recordkeeping, trade reporting, and other regulatory violations.

According to the SEC, Robinhood Securities LLC and Robinhood Financial LLC failed to meet multiple compliance requirements, including accurate reporting of trading activity, timely filing of suspicious activity reports, maintaining proper records, and adhering to short sale regulations. Acting SEC Director Sanjay Wadhwa noted that these violations reflect serious lapses in regulatory compliance.

The settlement also addressed Robinhood's failure to retain work-related communications conducted by employees on messaging apps and other "off-channel" platforms, an issue regulators have flagged in recent enforcement actions against broker-dealers. Additionally, the SEC found deficiencies in Robinhood’s trading data submissions, known as blue sheets, as well as inadequacies in its approach to managing cybersecurity risks.

Robinhood admitted to the violations and expressed its commitment to resolving the issues. General Counsel Lucas Moskowitz stated that the company is pleased to have reached a resolution and is focused on continuing to innovate for its customers while working with the SEC under the current administration.

The settlement adds to growing scrutiny over the compliance practices of broker-dealers, emphasizing the importance of robust recordkeeping and adherence to regulatory standards in the financial industry.

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