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Faced with a bevy of legal, regulatory and other headaches even after settling with the SEC for allegedly screwing its users—long before the aforementioned bevy was bolstered by new complaints about Robinhood screwing its users—Robinhood needed a win, something to show it was taking concerns about its business model, practices, etc., seriously without, you know, actually taking any of that seriously. So it, like every other financial services operation with such recourse available, it turned to FINRA, which by its nature and constitution as a self-regulatory organization is as forgiving and indulgent as you could want a rule-making daddy to be.

Well, even FINRA—which has seen a lot, even as it makes sure no one else can, and issued relative slaps on the wrist for those things—was taken aback by Robinhood’s aping its namesake with a rather maverick approach to those rules, albeit with the money flowing in the opposite direction from its traditional trajectory in Sherwood Forest.

Robinhood will pay roughly $70 million in penalties for its systemwide outages and misleading communication and trading practices, the Financial Industry Regulatory Authority said Wednesday.

The settlement regards the technical failures Robinhood experienced in March of 2020, Robinhood’s lack of due diligence before approving customers to place options trades and purveying misleading information to customers about aspects like trading on margin….

“The fine imposed in this matter, the highest ever levied by FINRA, reflects the scope and seriousness of Robinhood’s violations, including FINRA’s finding that Robinhood communicated false and misleading information to millions of its customers,” said Jessica Hopper, executive vice president and head of FINRA’s Department of Enforcement.

That’s a pretty serious tongue-lashing from a parent not known for raising its voice, and does nothing about its troubles with somewhat sterner disciplinarians, but—incorrigibly optimistic Zennial it is—Robinhood hardly seems to have noticed.

The company sees an upside to its latest legal run-in, too: It believes it has resolved lingering issues enough to move forward with its long-anticipated I.P.O…. Settling the FINRA investigations appears to have been the final legal hurdle that the company wanted to clear before “flipping” its hitherto confidential I.P.O. document…. If all goes to plan, expect Robinhood’s own shares to begin trading before the August doldrums.

And, you know, if you wanna trade what’s sure to be the hottest meme stock ever, well, Robinhood knows just the place.

The popular stock-trading app plans to set aside as much as 35% of shares in its coming initial public offering for individual investors, the company said in a regulatory filing on Thursday, a much larger retail allocation than in a typical deal. Robinhood wants people to sign up to buy the shares on its new platform that gives users access to IPOs before they start trading.

Robinhood to pay $70 million for outages and misleading customers, the largest-ever FINRA penalty [CNBC]
Robinhood Looks Beyond Its Big Fine [DealBook]
Robinhood Wants You to Buy Robinhood Stock on Robinhood [WSJ]

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