Online brokerage platform Robinhood’s bid to prevent Massachusetts regulators from proceeding with an enforcement action was rejected, according to a report by Reuters.
- Robinhood, which offers cryptocurrency trading among other investments, was attempting to block state regulators from moving forward with an enforcement action alleging the platform encourages inexperienced users to make risky trades without safeguarding limits.
- Suffolk County Superior Court Judge Kenneth Salinger ruled that Robinhood can continue to challenge the allegation but could not block Secretary of State Bill Galvin from proceeding, Reuters reported Thursday.
- “If the court were to strike down the challenged regulation, the division would still be entitled to press its separate claims that Robinhood’s alleged conduct was nonetheless unethical or dishonest,” Reuters quoted Salinger as writing.
- Galvin announced the case in December 2020, prompting Robinhood to sue in April. The company argued that the action contravened federal law because such a standard was rejected by the Securities and Exchange Commission when it adopted its own rule for brokerages in 2019.