In the Matter of Robinhood Financial, LLC
Admin. Proc. File No. 3-20171
On December 17, 2020, the Commission instituted and simultaneously settled administrative and cease-and-desist proceedings (the “Order”) against Robinhood Financial, LLC (“Robinhood” or the “Respondent”). In the Order, the Commission found that, from 2015 to September 2018, Robinhood violated the federal securities laws by making misstatements regarding: its sources of revenue obtained from certain principal trading firms; the execution quality for its customers’ orders; and its failure to satisfy its duty of best execution. Among other things, Robinhood was ordered to pay civil penalty of $65,000,000 the Commission. The Commission created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalty collected can be distributed to those harmed by the Respondent’s conduct described in the Order (the “Fair Fund”). See the Commission’s Order: Release No. 33-10906.
The Respondent has paid in full. The Fair Fund, comprised of the $65,000,000.00 paid by the Respondent, has been deposited in an interest-bearing account at the U.S. Treasury. All interest earned will accrue for the benefit of, and be added to, the Fair Fund.
On February 4, 2021, the Commission issued an order appointing Miller Kaplan Arase LLP as the tax administrator of the Fair Fund. See the Commission’s Order: Release No. 34-91061.
On April 16, 2021, the Commission issued an order appointing JND Legal Administration as the Fund Administrator of the Fair Fund, and set the administrator’s bond. See the Commission’s Order: Release No. 34-91590.
On June 4, 2021, the Commission published a notice of the proposed plan of distribution and opportunity for comment and simultaneously published the proposed plan of distribution (“Proposed Plan”). The notice provides the public with 30 days to submit their comments on the Proposed Plan. See the Commission’s Notice: Release No. 34-92115 and the Proposed Plan
The Proposed Plan provides that the distribution of the Fair Fund shall be made to those injured investors identified by Commission staff during its investigation of the underlying securities violation in accordance with the methodology detailed in the Proposed Plan.
On August 6, 2021, the Commission issued an order approving the Proposed Plan and simultaneously posted the approved plan of distribution (the “Plan”). See the Commission’s Order: Release No. 34-92591 and the Plan.
On August 18, 2021, the Commission issued an order approving the disbursement of $25,673,783.30 from the Fair Fund for distribution to eligible investors. See the Commission’s Order: Release No. 34-92705.
On January 31, 2022, the Commission issued an order approving the disbursement of $6,549,141.13 from the Fair Fund for distribution to eligible investors. See the Commission’s Order: Release No. 34-94106.
For more information, please contact the Commission: