The Regulators are investigating the fact that Robinhood CEO Vlad Tenev is not licensed by Financial Industry Regulatory Authority (FINRA), Wallstreet’s self-regulator. The company said it received an “investigative request” from FINRA on Monday.
Robinhood said it had received FINRA and Securities and Exchange Commission inquiries about employee trades involving GameStop, AMC, and others. Robinhood said regulators are seeking into whether these trades by employees “may have occurred in advance of the public announcement” of trading restrictions.
In a filing late Tuesday, Company said it received a FINRA investigation request looking for documents and information related to its compliance with agency’s registration requirements. Robinhood said the FINRA investigation is related to the “non-registration status” of both Tenev and co-founder Baiju Bhatt. He serves as Chief creative officer.
“Robinhood is evaluating this matter and intends to cooperate with the investigation,” the company said in the filing.
FINRA requires that the CEOs of registered broker-dealers be registered with the agency. In this case, Tenev is the CEO of Robinhood Markets, the parent company not registered with FINRA. The CEO of a parent company that owns a broker-dealer does not require to be registered. Being registered with FINRA allows the public to track any violations by individuals via its Broker Check tool.
Last month, FINRA slapped Robinhood with its biggest ever penalty of $70M accusing of harm caused to millions of customers. FINRA accused it for giving its customers and investors “false or misleading information.”
The FINRA licensing investigation is just Robinhood’s latest run-in with the regulator.
