The Massachusetts Secretary of the Commonwealth’s Securities Department plans to file a suit in a court against the cryptocurrency-friendly Robinhood platform. It is accused of violating state laws not related to digital assets, according to WSJ.
The regulator’s claims relate to the company’s marketing activity aimed at investors who are inexperienced in trading.
In a 20-page complaint, obtained by the publication, it states that Robinhood exposes clients to ‘unnecessary trading risks’ and ‘does not meet fiduciary standards’.
According to Massachusetts Secretary of the Commonwealth William Galvin, the platform ‘is positioned as a game in which you can win’.
The organization says that there are 500,000 Robinhood clients in the state with assets totaling more than $1.6 billion.
Earlier this year, Robinhood activity attracted the attention of the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). The reason may have been concerns about outages in March.
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