Robinhood Financial has 24 customer arbitrations pending against it, and “is open to reviewing” its mandatory arbitration policy, Lucas Moskowitz, deputy general counsel and head of government affairs at Robinhood Markets Inc., told Sen. Elizabeth Warren, D-Mass.
On Feb. 2, Warren probed Robinhood CEO Vladimir Tenev in a letter as to why the brokerage firm “abruptly changed the rules” for retail investors by restricting trades and imposing other limits during the frenzy in GameStop and other heavily shorted stocks the week of Jan. 25.
Warren asked Tenev for a response to numerous questions by Feb. 9.
Moskowitz’s letter, dated Feb. 12, was sent to Warren as well as to Acting Securities and Exchange Commission Chair Allison Herren Lee, and Robert Cook, CEO of the Financial Industry Regulatory Authority.
Moskowitz told Warren that “Robinhood has been in regular communications” with the SEC, FINRA and other self-regulatory organizations regarding the recent market volatility events.
In her Feb. 2 letter, Warren cited reports that at least 18 lawsuits have been filed against Robinhood in the last week, with some “seek[ing] damages on behalf of other aggrieved investors” related to the Reddit GameStop squeeze.
Stated Warren: “Secretive arbitration processes deny customers a fair hearing, undermine public accountability, and hamper efforts to assemble a thorough and complete understanding of events.”