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The Tale of Blundered Trading

The diversification of online services has opened a wider set of horizons for us. Having become that transformational trigger, the virtual sphere enjoys a far bigger number of beneficiaries than any previous methodologies could clock even during the peak of their existence. This universality isn’t a result of anything but merit. Online services have delivered advantages that couldn’t have been fathomed years ago. Nevertheless, with so many positives within the picture, it gets easier for the online world to conceal its shortcomings, and these shortcomings have popped up time and again in the disguise of serious damage to an individual or a much bigger group of people. After being pitted against problems of such nature quite a few times, governments across the world have chalked up a cluster of regulations that every online service provider must follow. Countries like USA have gone into deeper levels to ensure the same; hence they have established different authorities for different sectors. To ensure the smooth running of operations in the financial sphere, the USA government has set up FINRA (Financial Industry and Regulatory Authority). FINRA is bestowed with the responsibility to regulate financial services providers, thus encouraging ethical practices across the industry and protecting the end customer. Any deviations from the defined regulations can lead to heavy penalties, and online Stock-trading platform, Robinhood learned that the hard way. On Wednesday, FINRA handed a penalty worth $70 million to Robinhood after the regulatory body reached the conclusion that the company has harmed thousands of customers through “false and misleading” communications and other lapses.

FINRA asserted that the company has failed in its pledge to “demystify finances for all”. In addition, the regulator claimed that the company “negligently” misled customers. As per some recently-recorded cases, the company’s unethical behaviour created tragic consequences including loss of life. For instance, it was reported that a college student committed suicide after reading that his account had a negative cash balance of $730,165, which the company confirmed afterwards was an inaccurate sum.

While talking about this particular case, Jessica Hopper, head of FINRA’s enforcement division, went on to say:

“The fine imposed in this matter, the highest ever levied by FINRA, reflects the scope and seriousness of Robinhood’s violations”

While Robinhood has refused to provide any sort of comment on the matter itself, the company has confirmed that they’ll be paying the fine.

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