Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

William Galvin, Massachusetts secretary of the Commonwealth, speaking in Boston in October 2020.

Massachusetts regulators filed a complaint against online investing platform Robinhood on Wednesday, accusing the company of violating state securities laws by aggressively marketing to inexperienced investors and failing to protect customers and their assets.

Why it matters: The complaint suggests Robinhood's tactics exposed investors in the state to "unnecessary trading risks" and encouraged its customers to use the platform through “gamification.”

  • The filing recommends the the company be fined and also includes an order that Robinhood hire a consultant to review its infrastructure and marketing policies.

The big picture: Robinhood reported it experienced an outage on March 2 right as markets opened and jumped by 4%, preventing traders who use the app from trading during a market rebound.

  • Close to half a million people in Massachusetts have accounts with Robinhood, valued at more than $1.6 billion, according to the complaint.
  • Professional investors have likened Robinhood's design to a mobile gaming app.

What they're saying: “They’ve exploited the current situation with the pandemic. They contributed to the frothiness of the market, bringing people in who don’t know much about it," They’re not responsible fiduciaries," William Galvin, secretary of the Commonwealth of Massachusetts, said in an interview per Bloomberg.

  • “Their entire business plan is about building volume for their site and not helping people intelligently invest,” Galvin said in an interview, according to the Boston Globe.
  • “They have to make sure that their customers understand that there’s a risk of loss. It’s not a game. It’s real money, and they could lose it.”

The other side: Robinhood said in a statement that the company disagrees with the accusations and intends to defend itself “vigorously," according to the Globe.

  • “Millions of people have made their first investments through Robinhood, and we remain continuously focused on serving them,”

Go deeper

Felix Salmon, author of Capital
Dec 17, 2020 - Economy & Business

Robinhood accused of securities law violations

Illustration: Sarah Grillo/Axios

Robinhood is an unreliable trading platform that takes advantage of the poor, uses sophisticated gamification techniques to get them to spend money, and lies to them about their trades being free, according to a pair of lawsuits filed yesterday and today by the Securities and Exchange Commission and the state of Massachusetts.

Why it matters: Robinhood is the fastest-growing brokerage the world has ever seen, growing to an $11 billion valuation on the back of its ostensibly free trades and the gamification tools it uses to encourage its customers to do more of them.

Updated 6 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Eniola Odetunde/Axios

  1. Health: Most vulnerable Americans aren't getting enough vaccine information — Fauci says Trump administration's lack of facts on COVID "very likely" cost lives.
  2. Politics: Biden unveils "wartime" COVID strategyBiden's COVID-19 bubble.
  3. Vaccine: Florida requiring proof of residency to get vaccine — CDC extends interval between vaccine doses for exceptional cases.
  4. World: Hong Kong to put tens of thousands on lockdown as cases surge.
  5. Sports: 2021 Tokyo Olympics hang in the balance.
  6. 🎧 Podcast: Carbon Health's CEO on unsticking the vaccine bottleneck.

Trump impeachment trial to start week of Feb. 8, Schumer says

Senate Majority Leader Chuck Schumer. Photo: The Washington Post via Getty

The Senate will begin former President Trump's impeachment trial the week of Feb. 8, Majority Leader Chuck Schumer announced Friday on the Senate floor.

The state of play: Schumer announced the schedule after reaching an agreement with Republicans. The House will transmit the article of impeachment against the former president late Monday.