News - SEC wants to sue Robinhood

By Mike Hesp

SEC wants to sue Robinhood

Laws and regulations

The US Securities and Exchange Commission (SEC) is moving ahead with its plans to sue Robinhood, according to documents now filed.

The Securities and Exchange Commission (SEC) has issued a so-called Wells Notice sent to Robinhood - usually the last step before a formal complaint is filed.

The reason: the U.S. Securities and Exchange Commission accuses California FinTech of violating applicable laws related to securities regulation.

This is according to a company report released today, May 6 (item 8.01, page 3).

However, the Wells Notice was not issued against the entire company, but only against the crypto division, Robinhood Crypto.

In the aforementioned company report, Robinhood writes that it has always cooperated with the regulator.

The neo-broker then lists the possible consequences of the Wells Notice: "a civil injunction, a public administrative proceeding and/or an injunction proceeding."

Possible penalties for Robinhood include a "court order, restitution, prejudgment interest, civil monetary penalties, reprimands, revocations and restrictions on activities."

The US company, which became the center of media attention in the aftermath of the GameStop short squeeze in 2021 for imposing a purchase freeze, incurring the wrath of many retail investors, must therefore prepare for an intense legal dispute.

However, this is certainly not the first Wells Notice the SEC has issued in the recent past. Just a month ago, the decentralized crypto exchange (DEX) UniSwap received a such letter. Around the same time, the blockchain software company Consensys also received a Wells Notice.

The reason in both cases: Violations of securities laws.

Download the Anycoin App

Finally, a crypto app for everyone!

Check it out