Massachusetts securities regulators reportedly plan to file a complaint against popular stock-trading app Robinhood. The complaint accuses the company of aggressively marketing to unexperienced investors and exposing investors to "unnecessary trading risks," according to a report Wednesday from The Wall Street Journal, which reviewed a draft of the complaint.
Robinhood, which reportedly has more than 13 million customer accounts, has faced regulatory scrutiny before. The US Securities and Exchange Commission reportedly launched a probe into the company for not fully disclosing deals with high-speed traders, and last year Robinhood paid $1.25 million to settle claims from the Financial Industry Regulatory Authority for pricing violations.
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The company says it disagrees with the allegations in the complaint.
"Robinhood is a self-directed broker-dealer and we do not make investment recommendations," said a spokesperson for the company in an emailed statement on Wednesday. "Over the past several months, we've worked diligently to ensure our systems scale and are available when people need them. We've also made significant improvements to our options offering, adding safeguards and enhanced educational materials."
The Massachusetts Securities Division didn't immediately respond to requests for comment.