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On January 13, 2025, the U.S. Securities and Exchange Commission announced that two Robinhood broker-dealers, Robinhood Securities LLC and Robinhood Financial LLC, agreed to pay $45 million in combined civil penalties. The settlement addressed separate alleged failures involving suspicious-activity reporting, customer safeguards, cybersecurity, records, trading data and short-sale rules. It was not a customer compensation award.
Which Robinhood companies agreed to pay?
The respondents were Robinhood Securities LLC and Robinhood Financial LLC, subsidiaries that operate as broker-dealers. The SEC announced the agreement on January 13, 2025; “Robinhood” in headlines is shorthand, not the name of a single company that paid the entire amount. The SEC’s announcement states the penalty allocation and findings.
| Respondent | Agreed civil penalty |
|---|---|
| Robinhood Securities LLC | $33.5 million |
| Robinhood Financial LLC | $11.5 million |
| Combined | $45 million |
These are the civil penalties in the SEC settlement announced in 2025, not figures for every regulatory matter involving Robinhood.
What did the SEC say the firms did?
The SEC described findings across several areas and time periods. The matters were not a single episode, and the findings should not be read as applying to both firms in every instance.
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Suspicious-activity reporting and customer safeguards
The SEC said that from January 2020 through March 2022, Robinhood failed to investigate suspicious transactions promptly, leading to systematic failures to file suspicious activity reports on time. It also said the firms lacked adequate policies and procedures designed to protect customers from identity theft from April 2019 through July 2022.
Cybersecurity and unauthorized access
From June through November 2021, the SEC said Robinhood did not adequately address known risks from a remote-access cybersecurity vulnerability. In November 2021, a third party obtained unauthorized access and downloaded information related to millions of people who had provided information to Robinhood. The SEC release does not say that Robinhood sold customer data or that every person whose information was involved experienced identity theft.
Communications and books and records
The SEC described longstanding failures to preserve electronic communications, retention problems involving core operational databases, and failures to maintain certain brokerage customer communications as required between 2020 and 2021. Both firms admitted the findings in the order concerning off-channel communications failures.
Trading data and short-sale rules at Robinhood Securities
Separately, the SEC said Robinhood Securities failed for more than five years to provide complete and accurate electronic blue sheet trading information to the Commission. The firm admitted those findings.
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Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minuteThe SEC also said Robinhood Securities violated Regulation SHO requirements from May 2019 through December 2023 in connection with stock lending and fractional-share trading. The cited issues involved close-outs, order marking and locating shares. The SEC order identifies provisions including Regulation SHO Rules 200(g), 203(b)(1) and 204(a), as well as Regulation S-P Rule 30(a), Regulation S-ID Rule 201, and broker-dealer recordkeeping and reporting requirements. For the precise legal findings and provisions, consult the SEC’s order rather than relying on a short summary.
What penalties and other requirements did the settlement include?
Both firms agreed to be censured and to conduct an internal audit concerning compliance with off-channel communications requirements. Robinhood Securities also agreed to certify that it had remediated the deficiencies that caused the Regulation SHO violations.
The admissions were specific: both firms admitted the off-channel communications findings, and Robinhood Securities admitted the blue sheet findings. The SEC release does not say the firms admitted every finding described in the order.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Was this the same as Robinhood’s FINRA settlement?
No. Robinhood Markets’ Form 10-Q filed April 29, 2026, refers to the SEC matter as the “January 2025 SEC Settlement” and describes it as involving Regulation SHO, suspicious-activity-report timing, electronic blue sheet submissions, brokerage recordkeeping, the November 2021 data security incident and Regulation S-ID. The filing separately discusses a March 2025 FINRA settlement, involving $26 million in penalties and approximately $3.76 million in customer restitution plus interest, among other undertakings. Those are distinct proceedings and are not part of the SEC’s $45 million total. See Robinhood Markets’ Form 10-Q.
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Did customers receive money from the SEC settlement?
The cited SEC announcement and Robinhood filing describe the penalties and undertakings but do not describe a customer compensation program for this SEC settlement. The $45 million figure is the combined civil penalty agreed to by the two broker-dealers; it should not be described as money paid to customers.
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