Robinhood is reportedly under investigation by the Securities and Exchange Commission (SEC) regarding its disclosure policy.
The focus is on the practice to sell clients’ orders to high-frequency traders, according to the Wall Street Journal.
The probe could result in a US$10mln fine if the US trading app agrees to settle.
While most brokerages sell order flow as it is not illegal, Robinhood has more revenue coming from this avenue compared to its peers.
The firm attracted a record 3mln users to its platform in the first quarter of 2020, while its total customer base has expanded to over 13mln.