A Big Tech company that screwed over its customers got one infuriating penalty

More people than ever are at the mercy of Big Tech firms.

That’s the consequence of life becoming more digitized.

And a Big Tech company that screwed over its customers got one infuriating penalty.

Retail trading app Robinhood paid a record settlement of $70 million after being fined by the Financial Industry Regulatory Authority (FINRA).

The app was accused of misleading its relatively inexperienced investor base, and mismanaging its rapid technological growth.

Bloomberg reports:

“[T]he free trading app’s breakneck growth hurt the same small-time investors it sought to empower . . . A 20-year-old killed himself last year after mistakenly thinking he had lost more than $730,000 while using the app to bet on options. The client left behind a note questioning how he could have used margin because he didn’t believe he had enabled it on his account, according to Finra. Others who incurred major losses complained to Robinhood, expressing exasperation because they also didn’t think that they had agreed to trade using leverage. ‘I DO NOT have margin trading enabled on my account,’ one of the people said in an email to Robinhood, according to Finra. ‘I specifically selected to not trade on margin to limit my losses only to what I personally have in my account.’”

Robinhood also experienced critical outrages where customers lost an entire day of trading due to substandard technological safeguards.

But perhaps Robinhood’s biggest mistake happened during the GameStop short squeeze controversy.

Retail investors in a Reddit group called WallStreetBets decided to get back at large Wall Street hedge funds who were shorting GameStop stock.

The retail investors decided to buy GameStop en masse in order to drive up the price of the stock and punish the hedge funds while making money in the process.

Wall Street bigwigs manipulate the market all the time with pump-and-dump schemes, i.e. they’ll use their influence to get on financial news shows on TV, promote a stock, then sell it at an inflated price.

Retail investors decided to give Wall Street players a taste of their own medicine with their short squeeze, but Robinhood intervened and for a while blocked users from buying GameStop.

It was a clear sign that Robinhood broke terms of service to help the big hedge funds.

Around that time, Robinhood announced that they were going public.

Many retail investors felt betrayed by the app, and withdrew their money.

Even companies fashioned as champions of the little guy are not immune from the predation of the elites.

Stay tuned to Unmuzzled News for any updates to this ongoing story. 

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