Robinhood Under Probe For CEO’s FINRA Non-Registration Status

Robinhood and CEO Vlad Tenev are under investigation after it was found out Tenev isn’t licensed by Wall Street regulator the Financial Industry Regulatory Authority (FINRA), CNN reported. His lack of a license was reported over five months ago.

In addition, Robinhood submitted a filing Tuesday saying it had received FINRA’s investigative request, and that it also involved the non-registration status of Co-Founder Baiju Bhatt, according to CNN.

The probe will also cover Robinhood employees’ stock trades after the popular stockbroker instituted stock restrictions in January on meme stocks like AMC, GameStop and others, CNN reported. Regulators want to know if employee trades around this time “may have occurred in advance of the public announcement” of the restrictions.

The probe comes after Sen. Elizabeth Warren said in February that executives such as Tenev should be licensed and trained on market rules and risks, CNN reported.

Tenev, as the CEO of parent company Robinhood Markets, doesn’t necessarily need to be registered, according to CNN.

Robinhood has been a hot topic this year, with its upcoming initial public offering (IPO) said to be valued at $35 billion. Robinhood is still expected to file the IPO Wednesday (July 28) and begin trading on the Nasdaq Thursday, CNN reported.

Earlier this month, Robinhood disclosed in its Form-S1 that it had $81 billion in assets under custody (AUC), PYMNTS reported. Also, the company reported it had 18 million net cumulative funded accounts.

Robinhood focuses on retail investors, who now make up 10 percent of daily trading on Wall Street. That comes after the January events in which meme stocks were on the rise, which also coincided with one of the grimmest periods of the pandemic after the winter holidays.

In the IPO filing, Robinhood management said they “believe investing should be familiar and welcoming, with a simple design and an intuitive interface, so that customers are empowered to achieve their goals.”