What You Need to Know
- Robinhood filed to stop the Massachusetts Securities Division's attempt to revoke its license in the state.
- Robinhood argues the Massachusetts fiduciary rule does not apply to self-directed firms.
- The state's top securities regulator has accused Robinhood of using overly aggressive tactics and gamification to lure inexperienced investors.
Robinhood filed a lawsuit Thursday to overturn Massachusetts’ fiduciary rule and prevent the state’s securities division from proceeding in an administrative case against the brokerage firm.
Robinhood stated in its suit that the Massachusetts Securities Division’s new fiduciary rule, which took effect in August, “exceeds its authority under both Massachusetts state law and federal law.”
On Thursday, Robinhood filed a complaint and motion for preliminary injunction.
“Today, the Massachusetts Securities Division said it would seek to revoke Robinhood’s license in Massachusetts, which would prevent millions of Bay Staters from accessing our service,” Robinhood said on its blog.
“We love Massachusetts and our Massachusetts customers and we fully intend to continue serving them for the long term.”
Secretary of state William Galvin, Massachusetts’ top securities regulator, accused Robinhood in mid-December of violating state law by using overly “aggressive tactics to attract new, often inexperienced, investors” and “gamification to encourage and entice continuous and repetitive use” of its mobile application.