Robinhood says it’s under new investigation by FINRA days before its IPO

Vlad Tenev Top 100
  • Just days before its IPO, Robinhood said it received an investigative request from FINRA.
  • The agency is seeking information related to the fact that Robinhood CEO Vlad Tenev and co-founder Baiju Bhatt are not licensed by FINRA.
  • Robinhood said it is evaluating the matter and intends to cooperate with the investigation.
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Just days before its hotly anticipated initial public offering, Robinhood said it received an investigative request from FINRA, Wall Street’s self-regulator.

The agency is seeking information related to the fact that Robinhood CEO Vlad Tenev and co-founder Baiju Bhatt are not licensed by FINRA. The probe comes roughly five months after CNN Business first reported that Tenev is not registered with FINRA.

In an SEC filing on Tuesday, the mobile trading firm said on it received a FINA investigative request for documents and information related to its compliance with FINRA registration requirements for member personnel including Tenev and Bhatt.

Robinhood said it is evaluating the matter and intends to cooperate with the investigation.

According to a report from CNN Business, FINRA generally requires that the CEOs of registered broker-dealers register with the agency. The report explains that Tenev is the CEO of Robinhood Markets, which owns a broker-dealer and a clearing broker.

The CEO of a parent company that owns a broker-dealer does not necessarily need to be registered, the report says.

In February, Robinhood told CNN Business that Tenev does not directly oversee the FINRA-registered managers of either the broker-dealer or clearing broker.

The investigation comes a month after Robinhood agreed to pay FINRA’s largest ever fine to settle claims the the brokerage misled millions of customers and approved ineligible traders for risky strategies.