Robinhood Stock: $29.75M Fine Triggers Sharp Selloff

Robinhood's stock plummeted by more than 14% on Monday, dropping to $38.11 on NASDAQ after opening at $40.85, following news of regulatory penalties. The financial self-regulatory organization FINRA uncovered numerous violations at two Robinhood subsidiaries - Robinhood Securities and Robinhood Financial. The investigation revealed deficiencies in anti-money laundering practices, disclosure procedures, clearing system oversight, and social media communication storage. In some instances, the company allegedly failed to respond appropriately to warning signs of potential misconduct. Without admitting or denying the allegations, Robinhood agreed to pay $29.75 million, including $26 million in civil penalties and $3.75 million in customer restitution.

Bitcoin Weakness Compounds Stock Pressure

The online broker's share price faced additional pressure from Bitcoin's recent performance decline. Founded in 2013, Robinhood gained popularity for enabling cryptocurrency trading among its services. The current selloff is particularly notable given the company's recent strong quarterly performance, where it reported earnings per share of $1.04 for Q4 2024, substantially higher than the previous year's $0.03. Revenue nearly doubled to $1.01 billion. Despite the current setback, at $38.11, Robinhood's stock remains significantly above its 52-week low of $13.98 from August 2024, though well below its February 2025 peak of $66.07.

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Source StockWorld