On June 30, 2021, the Financial Industry Regulatory Authority (FINRA) ordered Robinhood Financial LLC (“Robinhood”) to pay a $57 million fine, the highest financial penalty ever ordered in FINRA history, for supervisory failures.  Robinhood will also pay an additional $12.6 million of restitution to users.  In announcing the severe penalty, FINRA attributed it to the “widespread and significant harm suffered by … millions of customers” as a result of Robinhood’s various “systemic supervisory failures.”  Without admitting to the allegations, Robinhood consented to FINRA’s findings and stated that it has “invested heavily in improving platform stability, enhancing our educational resources, and building out our customer support and legal and compliance teams.”

​On April 22, 2021, the Supreme Court held in AMG Capital Management, LLC v. FTC that the Federal Trade Commission (“FTC”) is not authorized to seek monetary relief, such as restitution or disgorgement, in enforcement actions brought directly in federal court without first initiating an administrative proceeding.  The Court’s significant decision overturned the Ninth Circuit’s ruling below and resolved a circuit split in favor of the minority position adopted by the Third and Seventh Circuits.  While the FTC retains the ability to seek such monetary penalties through other avenues, the Court’s decision deprives the FTC of an enforcement tool on which it has heavily relied.  

On October 25, 2016, New York Attorney General (“NYAG”) Eric Schneiderman announced settlements with daily fantasy sports providers DraftKings, Inc. (“DraftKings”) and FanDuel Inc. (“FanDuel”) that resolved claims that the companies had violated New York’s deceptive advertising laws by, among other things, failing to disclose the significant technological advantages enjoyed by more sophisticated players and overstating the likelihood of winning large cash prizes.  Settlement Agreement, In the Matter of DraftKings, Inc. (Oct. 25, 2016); Settlement Agreement, In the Matter of FanDuel Inc. (Oct. 25, 2016).  Under the terms of the settlements, DraftKings and FanDuel each agreed to pay $6 million in penalties and costs and reform their marketing efforts to align with a series of highly specific demands for disclosure by the NYAG.  

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