Robinhood,
the commission-free brokerage, has suffered a significant defeat in its case towards the
Massachusetts Secretary of State, Invoice Galvin. The Supreme Judicial Court docket of
Massachusetts (SJC) as we speak (Friday) dominated {that a} state fiduciary responsibility rule that’s central to the
case is legitimate, based on Reuters.
In December
2020, Galvin initiated an enforcement motion towards Robinhood, claiming that
the net brokerage failed to guard its clients and their cash. The
Secretary alleged that Robinhood handled buying and selling as a sport and applied methods
to lure younger and inexperienced merchants. As an illustration, the net dealer allegedly rained down confetti on the cellphone screens of its merchants after the execution of every commerce.
Moreover,
Gavin argued that the alleged failure violated the state’s fiduciary responsibility rule
which raised investment-advice requirements for brokers in early 2020. He,
due to this fact, sought to revoke the net buying and selling platform’s broker-dealer license.
Nevertheless, in March final
yr, a trial courtroom, the Suffolk County Superior Court docket in Boston, dominated in favour of
Robinhood. The courtroom
argued that federal legal guidelines took priority over the state regulator’s
stipulations. Moreover, Decide Michael Ricciuti, who heard the case, decided that Galvin overstepped his jurisdiction by implementing a regulation that was at odds
with federal laws.
Earlier in
Might, Finance Magnates had reported that Galvin and
Robinhood would argue the validity of the state regulator’s
fiduciary responsibility rule on the highest courtroom in Massachusetts. This got here after Gavin appealed towards the ruling on the SJC.
Robinhood,
the commission-free brokerage, has suffered a significant defeat in its case towards the
Massachusetts Secretary of State, Invoice Galvin. The Supreme Judicial Court docket of
Massachusetts (SJC) as we speak (Friday) dominated {that a} state fiduciary responsibility rule that’s central to the
case is legitimate, based on Reuters.
In December
2020, Galvin initiated an enforcement motion towards Robinhood, claiming that
the net brokerage failed to guard its clients and their cash. The
Secretary alleged that Robinhood handled buying and selling as a sport and applied methods
to lure younger and inexperienced merchants. As an illustration, the net dealer allegedly rained down confetti on the cellphone screens of its merchants after the execution of every commerce.
Moreover,
Gavin argued that the alleged failure violated the state’s fiduciary responsibility rule
which raised investment-advice requirements for brokers in early 2020. He,
due to this fact, sought to revoke the net buying and selling platform’s broker-dealer license.
Nevertheless, in March final
yr, a trial courtroom, the Suffolk County Superior Court docket in Boston, dominated in favour of
Robinhood. The courtroom
argued that federal legal guidelines took priority over the state regulator’s
stipulations. Moreover, Decide Michael Ricciuti, who heard the case, decided that Galvin overstepped his jurisdiction by implementing a regulation that was at odds
with federal laws.
Earlier in
Might, Finance Magnates had reported that Galvin and
Robinhood would argue the validity of the state regulator’s
fiduciary responsibility rule on the highest courtroom in Massachusetts. This got here after Gavin appealed towards the ruling on the SJC.
