Best Execution

Did Robinhood Employees Trade GameStop and AMC Before Robinhood’s Public Announcement to Restrict Trading on January 28, 2021?

Published on: September 1, 2021 | by Iorio Altamirano

On September 1, 2021, Robinhood ($Hood) filed its first amendment to its Form S-1 Registration Statement with the U.S. Securities and Exchange Commission (“SEC”).

The public filing, which amends the registration statement that Robinhood filed in connection with its July 2021 initial public offering (IPO), discloses that the SEC’s Division of Examinations and the Financial Industry Regulatory Authority (“FINRA”) have submitted inquires to Robinhood related to whether any employee executed trades in certain securities, including GameStop Corp. and AMC Entertainment Holdings, Inc., before the public announcement that Robinhood would restrict trading in those securities on January 28, 2021.

On Thursday, January 28, 2021, Robinhood designated specific stocks “position closing only,” restricting its customers from purchasing additional shares in those stocks. The targeted stocks included GameStop (NYSE: GME), AMC (NYSE: AMC), Blackberry (NYSE: BB), Nokia (NYSE: NOK), Koss Corporation (NYSE: KOSS), and Express, Inc. (NYSE: EXPR).

Robinhood’s Amended Registration Statement Discloses That Robinhood Is Facing Numerous Lawsuits, Customer Arbitrations, and Regulatory Investigations

Published on: September 1, 2021 | by Iorio Altamirano

On September 1, 2021, Robinhood ($Hood) filed Amendment No 1 to its Form S-1 Registration Statement with the U.S. Securities and Exchange Commission (“SEC”). Form S-1 is the registration statement that Robinhood filed in connection with its July 2021 initial public offering (IPO).

Robinhood’s latest public filing discloses that Robinhood continues to face regulatory, legal, and reputational backlash for its past business practices.

The filing also discloses that the SEC and Financial Industry Regulatory Authority (“FINRA”) are investigating whether any Robinhood employees traded “meme stocks,” including GameStop Corp. and AMC Entertainment Holdings, Inc., before the public announcement that Robinhood would impose trading restrictions on those securities on January 28, 2021.

Breaking News: Robinhood Ordered to Pay $70 Million, the Largest Financial Penalty Ever Ordered by FINRA

Published on: June 30, 2021 | by Iorio Altamirano

On June 30, 2021, the Financial Industry Regulatory Authority (“FINRA”) announced that it ordered Robinhood Financial LLC to pay approximately $70 million for systemic supervisory failures and significant harm suffered by millions of customers. The sanctions included an order to pay a $57 million fine and $12.6 million in restitution, plus interest, to thousands of harmed customers. According to the FINRA press release, the sanctions represent the largest financial penalty ever ordered by FINRA and reflect the scope and seriousness of the violations.

Robinhood agreed to the sanctions to settle broad regulatory allegations that the firm misled customers, approved ineligible traders for risky strategies, and did not supervise technology that failed and locked millions out of trading.

In determining the appropriate sanctions, FINRA stated that it “considered the widespread and significant harm suffered by customers, including millions of customers who received false or misleading information from the firm, millions of customers affected by the firm’s systems outages in March 2020, and thousands of customers the firm approved to trade options even when it was not appropriate for the customers to do so.”

Retail Investors Fight Back Against Robinhood for Its January 28, 2021, Trading Restrictions on “Meme Stocks,” Such as GameStop, AMC, Koss Corporation, and Express, Inc.

Published on: May 10, 2021 | by Iorio Altamirano

On Thursday, January 28, 2021, Robinhood designated specific stocks “position closing only,” meaning that customers could not purchase additional shares in those stocks. The targeted stocks included GameStop (NYSE: GME), AMC (NYSE: AMC), Blackberry (NYSE: BB), Nokia (NYSE: NOK), Koss Corporation (NYSE: KOSS), and Express, Inc. (NYSE: EXPR).

Robinhood was joined by other online brokers, including TD Ameritrade, Charles Schwab & Co, Inc, Interactive Brokers, LLC, Webull Financial, LLC, E*Trade Securities LLC, who all implemented trading restrictions on targeted securities. These online brokerage firms, including Robinhood, intentionally deprived their customers, without notice, of the ability to use their service in order to slow the growth of the targeted “meme stock” securities.

As the trading restrictions were put into place by the online brokerage firms, including Robinhood, retail investors watched helplessly as the value of their positions plummeted with no potential to remediate the positions given the wrongful sale pressure initiated by Robinhood and others.

Another Day, Another Disciplinary Action Against Aegis Capital Corp.

Published on: March 24, 2021 | by Iorio Altamirano

**Update: November 11, 2021** On November 8, 2021, Aegis Capital Corp agreed to pay nearly $2.7 million in sanctions for supervisory failures related to excessive and unsuitable trading by its brokers from July 2014 through December 2018. Click on the following link to read more: Aegis Capital Corp. Ordered to Pay Nearly $2.7 Million for Supervisory Failures Related to Rampant Excessive and Unsuitable Trading

Customers of Aegis Capital, including customers that have been notified that they may be receiving restitution, should consult with a securities arbitration law firm. If you or a loved one were a customer of Aegis Capital, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation and review of your legal rights.

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Aegis Capital Fined and Censured by FINRA

Published on: March 11, 2021 | by Iorio Altamirano

**Update: November 11, 2021** On November 8, 2021, Aegis Capital Corp agreed to pay nearly $2.7 million in sanctions for supervisory failures related to excessive and unsuitable trading by its brokers from July 2014 through December 2018. Click on the following link to read more: Aegis Capital Corp. Ordered to Pay Nearly $2.7 Million for Supervisory Failures Related to Rampant Excessive and Unsuitable Trading

Customers of Aegis Capital, including customers that have been notified that they may be receiving restitution, should consult with a securities arbitration law firm. If you or a loved one were a customer of Aegis Capital, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation and review of your legal rights.

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Network 1 Financial Securities Inc. Fined $25,000 by FINRA Over Best Execution Rule Violations – Red Bank, New Jersey

Published on: February 18, 2021 | by Iorio Altamirano

FINRA has fined Network 1 Financial Securities Inc. (“Network 1”) $25,000 over best execution rule violations. The firm was also censured and consented to revise its written supervisory procedures to comply with best execution rules.

Network 1 is headquartered in Red Bank, New Jersey, and has been a FINRA member since August 1983. Network 1 is a full-service broker-dealer firm. Its clients include institutional investors, managed pension funds, high net worth individuals, and hedge funds. The firm has 104 registered individuals and 21 branch offices.

In 2017, Network 1 was included in a Reuters study that analyzed FINRA data and identified 48 firms whose brokers have been flagged for serious incidents. The Reuters’ analysis showed that Network 1 had 44.6% of its brokers with at least one of the most serious red flags on their public disclosure. You can read more about the Reuters analysis and our firm’s work to update the analysis here.

J.H. Darbie & Co., Inc. Fined $25,000 by FINRA Over Best Execution Rule Violations

Published on: February 12, 2021 | by Iorio Altamirano

Iorio Altamirano LLP is investigating claims on behalf of J.H. Darbie & Co., Inc. customers after the firm was censured and fined $25,000 by FINRA for best execution rule violations. Specifically, FINRA found that the firm’s publicly available reports on its order routing practices for non-directed orders contained inaccurate and incomplete information. FINRA also found that the firm had submitted inaccurate and incomplete Order Audit Trail System (OATS) data. FINRA’s Order Audit Trail System (OATS) is an integrated audit trail of order, quote, and trade information for all NMS stocks and OTC equity.

If you have lost money with J.H. Darbie & Co., Inc., contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

J.H. Darbie & Co., Inc. is headquartered in New York, New York, and has been a FINRA member since February 1998. The firm provides retail brokerage services and employs 36 registered representatives.