Robinhood

Reasons to avoid

1. The SEC fined Robinhood $45 million in January 2025 for more than 10 separate securities law violations, including failing to file suspicious activity reports, cybersecurity failures that led to a data breach, and inadequate identity theft protections.sec.gov2025-01-13
2. FINRA fined Robinhood $26 million in March 2025 for failing to maintain adequate anti-money laundering programs, allowing manipulative trading and suspicious money movements to go undetected. Robinhood also paid $3.75 million in restitution to customers whose orders were canceled and re-executed at worse prices.investmentnews.com2025-03-10
3. Robinhood paid $7.5 million in 2024 to settle Massachusetts regulators' claims that it used gamification tactics — confetti animations, digital scratch tickets, push notifications, and engagement nudges — to encourage inexperienced investors to make riskier trades.bostonglobe.com2024-01-18
4. The SEC fined Robinhood $65 million in 2020 for lying to customers about how it makes money. While advertising "commission free" trading, Robinhood was selling customer orders to market makers — and had negotiated to accept lower prices for customers in exchange for higher payments to itself.sec.gov2020-12-17
5. In November 2021, a hacker obtained unauthorized access to Robinhood's systems and stole data on approximately 7 million customers, including full names, email addresses, and in some cases dates of birth and zip codes. The SEC found the company had failed to address a known cybersecurity vulnerability for months before the breach.sec.gov2025-01-13
6. In January 2021, Robinhood abruptly halted buying of GameStop, AMC, and other "meme stocks" during peak trading activity, locking retail investors out of the market while institutional traders could still act. The move drew bipartisan condemnation in Congress and multiple class-action lawsuits.cnbc.com2021-01-28