March 4, 2024



Robinhood Markets said regulators were investigating the company’s compliance with record-keeping requirements, including employees’ use of “out-of-channel communications.”

Menlo Park, Calif.-based Robinhood said in a quarterly filing Wednesday that it is cooperating with the investigations by the U.S. Securities and Exchange Commission and FINRA law enforcement.

The SEC is also investigating whether the brokerage firm complied with transaction reporting rules related to securities lending and odd lot trades, the documents show.

Last year, regulators settled with some of the biggest banks in a wide-ranging investigation into how they monitored employee communications on unauthorized messaging apps like WhatsApp.

Robinhood also reported first-quarter results after U.S. markets closed on Wednesday. Revenue for the period totaled $441 million, beating analysts’ average estimate of $422.8 million in a Bloomberg survey. It reported an adjusted net loss of $511 million, or 57 cents a share, missing Wall Street expectations by a penny.

Shares of Robinhood rose 4.8 percent in early trading on Thursday in New York, after closing at $9.07. The stock had lost more than three-quarters of its value between the company’s 2021 initial public offering and Wednesday’s close.