Robinhood CEO Says Company Responded to SEC Wells Notice

Robinhood Markets reportedly submitted a response to a Securities and Exchange Commission (SEC) Wells Notice that it received in May, which warned the company of impending enforcement action related to its cryptocurrency business.

Vlad Tenev, CEO of Robinhood, told Bloomberg Television about this move in a Thursday (Aug. 8) interview, while adding that he had no other updates to share, Bloomberg reported.

“We’ve spent a lot of time making sure that the response is as high-quality as possible,” Tenev said, per the report.

Robinhood said in May that it received a Wells Notice from SEC staff indicating that they would recommend that the commission take enforcement action against the company.

Dan Gallagher, Robinhood’s chief legal, compliance and corporate affairs officer, said in a May 6 blog post: “After years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,’ we are disappointed that the agency has decided to issue a Wells Notice related to our U.S. crypto business.

“We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be on both the facts and the law.”

During the Thursday interview with Bloomberg Television, Tenev also said that Robinhood’s trading platform didn’t have issues “of a significant nature” during Mondays global stock-market selloff, when some of its competitors had outages.

The company’s execution venue, Blue Ocean ATS, suspended overnight trading when the scale of the selloff overwhelmed its infrastructure, according to the report.

Tenev told Bloomberg: “We look to make sure they enable it for all of their customers and all of our customers as soon as possible.”

Blue Ocean, the platform powering 24-7 trading for Robinhood and other brokers, went offline Monday amid the surge in activity.

While that was not ideal for Robinhood users trying to participate in the market action, it highlighted the ongoing popularity of retail trading, PYMNTS reported Wednesday (Aug. 7).

On that day, Robinhood reported record quarterly revenue and profit that beat Wall Street expectations.