Last December, Robinhood was fined $65 million, by the Securities and Exchange Commission (SEC) for allegedly misleading customers about one of its revenue sources. In early 2021, Robinhood curtailed users’ ability to trade certain meme stocks like GameStop and AMC, generating the wrath of U.S. In June, the company faced the largest financial penalty ever issued by the Financial Industry Regulatory Authority, agreeing to pay $70 million for various regulatory allegations, including system outages, misleading users and approving customers to trade options - a risky investing move - when it was not appropriate to do so. The platform has seen its fair share of criticism. While the company's revenue hit $565 million in the second quarter - thanks in part to a surge in crypto trading - its third-quarter revenue dropped significantly to $365 million. Robinhood went public in July 2021, trading on the Nasdaq under the ticker symbol HOOD.
The Silicon Valley darling - which grew its following amid an investing surge during the COVID-19 pandemic and the ongoing cryptocurrency boom - is a commission-free trading platform, meaning users can invest in everything from ETFs to Dogecoin without going through a traditional brokerage.
The investing app is a favorite among everyday traders who congregate in online forums like Reddit’s r/WallStreetBets, and has surpassed 18 million active users since its launch in 2013. If you are at all interested in investing, you’ve almost certainly heard of Robinhood.