The Securities and Exchange Commission (SEC) announced that two Robinhood broker-dealers have agreed to pay a combined $45 million in civil penalties to settle charges of failing to comply with regulatory requirements.
Robinhood Securities will pay $33.5 million, while Robinhood Financial will pay $11.5 million. The companies also admitted to certain findings and agreed to conduct an internal audit on off-channel communications compliance.
The SEC’s order found that the two firms failed to observe a broad array of significant regulatory requirements, including suspicious activity reporting, identity theft protection, unauthorized access to systems, and retention of brokerage data.
In a statement, Robinhood said it is “pleased to resolve these matters” and emphasized its commitment to complying with regulatory requirements. The company’s general counsel noted that most of the violations were historical and had been previously addressed, and that the company looks forward to working with the SEC under a new administration.
The penalties come as part of broader efforts by the SEC to protect investors and promote market integrity. Neobanks have gained popularity in recent years due to their digital onboarding and competitive rates, but challenges and risks remain. The small- to medium-sized business (SMB) market is vast, with over 33 million businesses in operation in the US alone.
However, small businesses face challenges such as delayed payments, cash flow struggles, and limited access to loans from traditional financial institutions. Neobanks have stepped in to address these issues, offering digital loan solutions and expense management tools. Despite their popularity, neobanks still face regulatory scrutiny, including fines for failing to implement proper anti-money laundering controls.
In recent years, several neobanks have faced regulatory actions, including Starling Bank, which was fined $38 million by the UK’s Financial Conduct Authority for failing to implement proper financial crime controls. The incident highlighted the importance of robust compliance measures in the fintech industry.
Source: https://www.pymnts.com/news/regulation/2025/robinhood-to-settle-sec-charges-of-broad-array-of-violations