Massachusetts state regulators will move forward with enforcement action against Robinhood as the fintech broker failed to block their allegations in court, Reuters reports. According to Suffolk County Superior Court Judge, Kenneth Salinger, Robinhood can continue challenging in court the legality of the state's new fiduciary rule.
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Salinger says the state’s securities division could still press its separate allegations against Robinhood’s alleged conduct even if the court had struck down the challenged regulation.
"If the court were to strike down the challenged regulation, the division would still be entitled to press its separate claims that Robinhood’s alleged conduct was nonetheless unethical or dishonest," Salinger
As iHodl reported earlier, Massachusetts watchdogs filed a lawsuit against Robinhood accusing the millennial-focused investment app of "aggressive tactics to attract inexperienced investors." Massachusetts securities regulators say Robinhood is using gamification strategies "to manipulate customers" and often experiences technical issues.
The company is disagreed with the allegations by the Massachusetts Securities Division and plans "to defend the company vigorously," said a Robinhood spokesperson.
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