James Tierney, an assistant professor of law at the University of Nebraska College of Law and previously worked at FINRA and SEC on registration issues, told CNN, “Robinhood is facing lots of scrutiny in the run-up to its IPO, and regulators are poring through its operations and structure.” He added that it is not surprising that a probe “extends to Tenev’s registration status, given his prominent role as the public face.”
Previous FINRA and SEC investigations into Robinhood
Last month, FINRA ordered Robinhood to pay approximately $70 million including $57 million in penalty and around $12.6 million in restitution plus interest for its systemic supervisory failures and significant harm to customers.
FINRA penalized the company after an investigation into its regulatory violations between September 2016 and March 2021. The regulator found that Robinhood made false and misleading statements to customers regarding a variety of critical issues including its system outages, options product offering, and margin-related communications, etc.
