Online brokerage Robinhood on Thursday agreed to pay a $7.5 million fine and overhaul its practices to resolve allegations by Massachusetts' securities regulators that it encouraged inexperienced investors to place risky trades, Reuters reported. Massachusetts Secretary of State Bill Galvin filed an enforcement action in 2020 alleging Robinhood's app-based service used strategies that treated trading like a game to lure young, inexperienced customers into placing risky trades. Galvin, the state's top securities regulator, said such "gamification" strategies including having confetti rain down for each trade made on Robinhood's app. The settlement also addresses issues uncovered through another investigation by Galvin's office into a 2021 data security breach and allegations Robinhood failed to maintain reasonable cybersecurity policies.
