The U.S. Securities and Exchange Commission (SEC) is probing if banking apps provider Robinhood may be breaking regulations as it enables users to trade on almost 100,000 other stocks from less than a dime a share.
In a request filed Tuesday, the SEC says the firm has “systemically and substantially” violated United States securities laws, according to a report by Bloomberg. The agency said Robinhood plans to engage in misleading marketing and stock transfers without a permit, Bloomberg said.
Robinhood has not provided an indication of the scope of the SEC’s probe, according to the report. Robinhood, which allows users to trade almost any stock for a commission as low as $2.25, is fighting off previous SEC scrutiny, with the agency ordering it to sell off as much as 75 percent of its traded options business in 2014.
Reuters also reported that Robinhood faces a federal criminal investigation over its derivatives business and securities law violations.
Robinhood was valued at a reported $2.4 billion as of March 2019, with stocks backed by the firm climbing by roughly 9 percent over the last six months, Bloomberg reports.
Robinhood did not immediately respond to requests for comment.