Massachusetts’ securities watchdog will appeal against a ruling delivered last year in favour of Robinhood following its enforcement action against the online brokerage in December 2020. Massachusetts Secretary of State, Bill Galvin, and Robinhood will argue the validity of the regulator's fiduciary duty rule at the Supreme Judicial Court of Massachusetts, Reuters reported on Wednesday.

Regulator Appeals Case at Supreme Court

Galvin in an administrative action against Robinhood sought to revoke the firm's broker-dealer license, accusing the firm of failing to protect its customers and their money. As a result of this alleged failure, Galvin accused Robinhood of violating its fiduciary duty rule which raised investment-advice standards for brokers in early 2020.

Furthermore, the Secretary alleged that the commission-free brokerage treated trading as a game and implemented strategies to lure young and inexperienced traders. He also claimed that Robinhood rained down confetti on the phone screen of its traders after the execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term of each trade.

However, in March 2022, Judge Michael Ricciuti of the Suffolk County Superior Court in Boston ruled in Robinhood's favour, arguing that the federal stance on the matter overrides the state regulator’s requirements. Moreover, Ricciuti judged that Galvin went beyond his authority to implement a regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term that conflicted with federal laws.

At the time, Finance Magnates reported that the ruling only impacted a part of the Massachusetts securities watchdog's action against Robinhood as the regulator could still pursue the claims that the brokerage adopted unethical practices and even failed to adequately supervise its employees.

In February, Galvin appealed against the ruling at the Supreme Judicial Court, asking the top Massachusetts court to reverse the lower court’s decision. Oral presentations were then fixed for May 3, 2023.

The latest information on the case reveals that Massachusetts’ supreme court will consider whether to revive the fiduciary rule or not. However, Robinhood’s lawyers are maintaining the lower court’s ruling that Galvin does not have the authority to implement such a rule, Reuters reported.

Robinhood Settles with NASAA

Meanwhile, seven state securities regulators led by Alabama last month fined Robinhood’s brokerage subsidiary up to $10.2 million for its outages in March 2020. The regulators under the aegis of the North American Securities Administrators Association (NASAA) settled with Robinhood for its 'operational and technical failures' that hurt Main Street investors during the period.

On the contrary, Judge Edward Chen of the US District Court in San Francisco in February dismissed a lawsuit accusing Robinhood Markets, Inc. of misleading retail investors during an initial public offering almost two years ago.

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