Popular trading platform Robinhood is currently under investigation in the context of its claims to sell client orders to high frequency traders, the Wall Street Journal reported on Wednesday.
The Securities and Exchange Commission's investigation into Silicon Valley's launch is at an advanced stage and could result in a fine of more than $ 10 million if the company agrees to a settlement, the Journal reported, citing familiar with the matter People.
Selling order flow is not in itself illegal and is done by most brokers. However, a greater portion of Robinhood's total revenue comes from practical experience than other brokers.
Robinhood posted $ 180 million in trading volume in the second quarter, roughly double the previous quarter as investors flocked to a platform to tackle the historic market boom.
"We strive to maintain constructive relationships with our regulators and to work fully with them. We do not discuss or comment on our communications with our regulators," a Robinhood spokesman told CNBC.
The SEC declined to comment.
The millennial app, which offers commission-free trades, recorded a historic 3 million new accounts in the first four months of 2020.
– Click here to read the original WSJ story.
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