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Robinhood will pay $10.2 million in penalties for harming “main street investors,” after the company’s platform outages in March 2020 sparked a probe by seven state securities regulators. 

“Robinhood repeatedly failed to serve its clients, but this settlement makes clear that Robinhood must take its customer care obligations seriously and correct these deficiencies,” North American Securities Administrators Association President Andrew Hartnett said in a press release. 

The settlement comes after a North American Securities Administrators Association investigation, which was led by state securities regulators in Alabama, Colorado, California, Delaware, New Jersey, South Dakota, and Texas. 

Robinhood did not immediately respond to a request for comment. 

Robinhood under scrutiny

Robinhood’s operations came under scrutiny in March 2020, when its platform experienced outages while hundreds of thousands of investors were using the app to make trades. Before March 2021, regulators say Robinhood had “deficiencies” in its review and approval process for options and margin accounts. Some users were unable to process trades, even as some stock prices dropped, due to weaknesses in Robinhood’s customer service and escalation protocols.

Robinhood is accused of “negligent dissemination of inaccurate information to customers,” along with failing to have a reasonably designed customer identification program. 

The regulators also say Robinhood failed to supervise technology that was key to providing customers with core broker-dealer services and did not report all customer complaints to the Financial Industry Regulatory Authority and state regulators.

Robinhood did not admit or deny the allegations, according to the California Department of Financial Protection and Innovation. The company “fully cooperated” with the investigation, and the agency said it found no evidence of willful or fraudulent conduct. 

“Platforms such as Robinhood must comply with common-sense protections for investors and consumers as required by law,” DFPI Commissioner Clothilde Hewlett said.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Dogecoin quickly dived on Thursday after Twitter appeared to revert back to its normal blue bird logo, dumping a meme of a Shiba Inu dog that had graced the social network since Monday.

The price of DOGE fell as much as 8.2% by 5:09 p.m. EDT to $0.085, according to CoinGecko. It had shot up over 27% on Monday, as CEO Elon Musk joked about switching out the logo for the meme.

While the the price of the meme coin initially peaked on Monday following Musk’s move, volumes have been in decline since Tuesday, according to Binance data via TradingView. 

DOGE declines

Analysts had been skeptical of the rally, noting the lack of depth in dogecoin markets (14% of volume is based on DOGE/USDT trading on Binance) and the short-lived nature of these rallies, which have been historically driven by Musk’s “sporadic behavior.”

“With a meme token like DOGE, the majority of its big moves come from narratives, and illiquidity acts as a leveraging force on the size of those moves,” Conor Ryder, a research analyst at Kaiko, told The Block earlier in the week.

Musk hasn’t yet tweeted about the switch back to blue bird logo.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.