The Financial Industry Regulatory Authority (FINRA) has fined the U.S.-based fintech company Robinhood $1.25 million for best execution violations related to its customers’ equity orders and related supervisory failures during 2016 — 2017.
Robinhood reportedly agreed to hire an independent consultant to conduct a comprehensive review of the firm's best-performing systems and procedures.
Senior Vice President and Acting Head of FINRA’s Department of Enforcement Jessica Hopper claims best execution of customer orders "is a key investor protection requirement."
"FINRA member firms must exercise reasonable diligence in performing regular and rigorous reviews to achieve best execution for their customers," Hopper added.
FINRA found out that Robinhood has sent unsolicited orders from its customers to four broker-dealers, each of whom paid Robinhood for this order.
Previously iHodl reported that the U.S.-based financial services company will launch fractional stock-trading.