Robinhood Markets, Inc. HOOD shares are trading slightly higher in the premarket session on Tuesday.
The U.S. Securities and Exchange Commission (SEC) announced that Robinhood Securities LLC and Robinhood Financial LLC will pay a combined $45 million in civil penalties to settle a series of regulatory violations.
The charges stem from failures related to trading activity reporting, cybersecurity practices, recordkeeping, and customer communication.
The SEC’s investigation revealed multiple infractions.
From January 2020 to March 2022, Robinhood failed to promptly investigate suspicious transactions, leading to delays in filing suspicious activity reports. Additionally, from April 2019 to July 2022, the company did not implement adequate safeguards against identity theft.
A cybersecurity vulnerability between June and November 2021 also allowed unauthorized access to customer data, exposing the personal information of millions of customers.
In a statement to the New York Times, the company’s general counsel, Lucas Moskowitz, called the issues mostly past problems that have already been addressed.
He also mentioned that the company was looking forward to working with the SEC under President-elect Donald J. Trump’s new administration.
Robinhood also faced issues with maintaining records, failing to preserve electronic communications and core brokerage data as required by law, per an SEC filing.
Moreover, from 2019 to 2023, Robinhood Securities did not comply with specific securities trading regulations related to short sales and fractional share trading, violating rules designed to prevent market manipulation.
Robinhood Securities will pay $33.5 million as part of the settlement, while Robinhood Financial will pay $11.5 million.
The firms have also agreed to conduct internal audits and address the regulatory deficiencies identified in the SEC’s order.
The SEC emphasized the importance of ensuring broker-dealers uphold their legal obligations to protect investors and market integrity. The investigation was led by the SEC’s New York and San Francisco Regional Offices.
According to Benzinga Pro, HOOD stock has gained over 262% in the past year. Investors can gain exposure to the stock via Series Portfolios Trust Adaptiv Select ETF ADPV.
Robinhood Markets Stock Prediction For 2025
Equity research analysts on and off Wall Street typically use earnings growth and fundamental research as a form of valuation and forecasting. But many in trading turn to technical analysis as a way to form predictive models for share price trajectory.
Some investors look to trends to help forecast where they believe a stock could trade at a certain point in the future. Looking at Robinhood Markets, an investor could make an assessment about a stock's long term prospects using a moving average and trend line. If they believe a stock will remain above the moving average, which many believe is a bullish signal, they can extrapolate that trend into the future using a trend line. For Robinhood Markets, the 200-day moving average sits at $24.87, according to Benzinga Pro, which is below the current price of $39.59. For more on charts and trend lines, see a description here.
Traders believe that when a stock is above its moving average, it is a generally bullish signal, and when it crosses below, it is a more negative signal. Investors could use trend lines to make an educated guess about where a stock could trade at a later date if conditions remain stable.
Price Action: At the last check on Tuesday, HOOD shares were trading higher by 0.91% to $39.98 premarket.
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