According to a report from the Wall Street Journal, Robinhood Markets Inc is being investigated by the U.S. Securities and Exchange Commission (SEC) over its early failure to fully disclose its practice of selling clients’ orders to high-speed traders.
The investigation is said to be at an advanced stage, said source familiar with the matter at hand, and the company could potentially pay a fine exceeding $10 million, said sources.
Incidentally, Robinhood Markets, a fintech startup credited with popularizing trading among millennials, is also being investigated by the SEC for its handling of a system outage in March, said a report from Bloomberg News last month.
According to a spokeswoman from Robinhood, the company strives to cooperate fully with its regulators but does not discuss or comment on its communications with them.
The SEC declined to comment.