Too many customer complaints: a new SEC investigation against Robinhood

The startup attracted the attention of SEC and FINRA specialists.

American regulators will check the Californian startup Robinhood. The investigation was launched due to numerous complaints against the brokerage service by its users.

According to media reports, the consumers filed over 400 complaints about Robinhood in the first half of 2020 with regulators. Its competitors usually cause 4 times less complaints.
The US Securities and Exchange Commission (SEC) and the Financial Services Regulatory Authority (FINRA) launched an investigation because of user dissatisfaction with the project.

One of the reasons for it was the technical problems of the platform. At the beginning of March 2020, users of the startup encountered outage and inability of the team to cope with the problem. Amid technical problems, the project lost many clients. A few days later, the service had outages again.

Users noticed that they couldn’t access the Robinhood platform, but it’s not only that. They lacked necessary information – the company representatives were unable to provide it and consult the customers in time. Instead, the project team offered  to write a complaint by e-mail.

After March outages, Robinhood said they decided to increase the number of employees in the support department. The users of the platform received compensation for the inconvenience caused. Judging by the number of discontented tweets from the startup’s clients, many technical problems still remain unresolved.

In particular, users note that they cannot access the platform when it cannot cope with high traffic. Apart from technical problems, the reputation of the company was neggatively affected after one of its users committed the suicide in June as he misinterpreted the results of deals in his account. However, the company still managed to attract $ 200 million in investments during the investing round.

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