Photo by Olivier Douliery ( Getty Images)Robinhood, a financial platform for investors, is finally paying after being subject to a series of class actions and investigations by multiple regulators. The Financial Industry Regulatory Authority (FINRA), announced Wednesday that it had fined Robinhood $57 million. It also ordered it to pay $12.6 million in restitution and interest to thousands of customers who were harmed in a variety of ways over the past year. Robinhood will pay approximately $70 million for the settlement.AdvertisementThese sanctions are the most severe financial penalties ever imposed by FINRA. They reflect the severity of the violations and were determined to be appropriate punishments for the extensive and substantial harm Robinhoods customers sustained during its widespread outages last march. FINRA notes that the fine is intended to pay back the thousands of customers who were allowed to trade potentially dangerous options even though they shouldn't.After Robinhood's botched response to multiple outages that occurred in March 2020, which coincided with two bad days for stocks, authorities began an investigation into Robinhood in August. Robinhood customers filed a class action lawsuit against the company claiming that Robinhood violated their contract by failing offer a trading platform that actually worked. Robinhood's role in the Gamestop fiasco is not addressed by FINRAs announcement. However, Robinhood was subject to dozens of class actions from angry customers who were unable to trade certain stocks on the platform.FINRA's investigation found that Robinhood was not being truthful in communicating information to customers that was misleading or false. This included details such as how much cash was in a customer's account and what their buying power was. The authority claims that Robinhood's misstatements caused thousands of customers to lose more than $7million in cash. It will have to repay the money in restitution. Robinhood will now have to reimburse customers who lost thousands of dollars due to platform outages by $5 million.Robinhood's blog was published shortly after FINRA had published the announcement. It didn't deny any charges made by the authority, but it didn't address them.We have made investments in customer support and now offer phone support for several areas including options and equities trading and account security. We have increased our options and educated customers about the options. It is now that we need to see if the company stops lying to customers.
