Robinhood, the retail trading platform, is set to pay up to $10.2 million in penalties for operational and technical failures that harmed investors, according to an announcement from the California Department of Financial Protection and Innovation. The multi-state settlement followed a North American Securities Administrators Association investigation into Robinhood platform outages in March 2020. The investigation found deficiencies in Robinhood's review and approval process for options and margin accounts, weaknesses in monitoring and reporting tools, and insufficient customer service and escalation protocols. This isn't Robinhood's first multi-million dollar penalty, as the platform has paid settlements to the New York State Department of Financial Services and the U.S. Securities and Exchange Commission for regulatory violations, and a fine from the Financial Industry Regulatory Authority for failing to protect customers.

(By Sandali Handagama)