Robinhood drops after disclosing ‘Wells Notice’ from staff of SEC

Robinhood disclosed that on May 4, Robinhood Crypto received a “Wells Notice” from the staff of the Securities and Exchange Commission stating that the staff has advised Robinhood that it made a “preliminary determination” to recommend that the SEC file an enforcement action against the company. The potential action may involve a civil injunctive action, public administrative proceeding, and/or a cease-and-desist proceeding and may seek remedies that include an injunction, a cease-and-desist order, disgorgement, pre-judgment interest, civil money penalties, and censure, revocation, and limitations on activities, Robinhood said in a regulatory filing. As previously disclosed, Robinhood Crypto has received investigative subpoenas from the SEC regarding, among other topics, the company’s cryptocurrency listings, custody of cryptocurrencies, and platform operations. Robinhood Crypto “has cooperated with this investigation,” the company noted. Robinhood shares are down 3% to $17.43 in premarket trading.