What happened now? In the case of someone being fired when they fell, Robinhood, the company behind the popular investment app, was fined $30 million as soon as it announced that almost a quarter of its employees had been laid off, for a net loss of $295. million in the second quarter.
Starting with the news of the downsizing, CEO and co-founder of the company Vlad Tenev announced that Robinhood will cut headcount by about 23% as part of a broader reorganization of the company into a CEO structure.
Tenev said that while all parts of the business will be affected, the main areas will be operations, marketing and program management functions. The move comes just months after Robinhood laid off about 9% of its staff in April.
Like many companies currently laying off employees and streamlining, Tenev said the current economic turmoil and rising inflation played a significant role in the decision. Cryptocurrency crash is also an important factor; a fall in the prices of digital assets was also observed Coinbase as well as The open sea cut staff.
Second quarter of Robinhood financial results didn’t bring good news either. The company’s revenue was down 44% year on year to $318 million, resulting in a net loss of $295 million.
But Robinhood’s troubles didn’t end there. New York’s top financial regulator has fined the company’s cryptocurrency division $30 million for alleged violations of anti-money laundering and cybersecurity regulations.
Wall Street Magazine writes that the New York State Department of Financial Services found serious deficiencies in the company’s management and oversight of its compliance programs. A supervisory review and investigation revealed that the Robinhood Bank Secrecy Act and the Anti-Money Laundering Compliance Program were understaffed and failed to transition from a manual monitoring system after the company’s size increased.
In addition, the company’s cybersecurity program did not take into account operational risks, and its policies did not meet the requirements of the regulator regarding cybersecurity and virtual currency. The Robinhood website also did not have a dedicated phone number for receiving consumer complaints.
In addition to the fine, Robinhood must hire an independent consultant to evaluate its efforts to resolve issues flagged by the regulator.
Credit: www.techspot.com /