Robinhood Moves Toward IPO Despite GameStop Controversy

Stock trading app Robinhood has chosen Nasdaq as the exchange for its IPO this year, despite being embroiled in controversy over its treatment of its customers during the Gamestop trading frenzy and previous problems including trading outages.

CNBC reports that the popular day-trading app Robinhood has chosen the Nasdaq as the exchange for its eventual initial public offering, according to sources. The company has not yet filed officially for the listing but is expected to at some point this year.

It’s currently unclear whether Robinhood has chosen a direct listing or a traditional IPO, according to sources.

Robinhood will likely file an S-1 with the Securities Exchange Commission in the near future, it usually takes one to two months for companies to make their debut once they file with the SEC. Goldman Sachs is reportedly advising Robinhood on the IPO.

Breitbart News recently reported that Robinhood is currently in talks with securities regulators and other authorities over a number of issues including last month’s major surge in shares of GameStop and Robinhood’s temporary halting buys on the stock. The company is facing almost 50 lawsuits including class action suits related to its actions against customers holding GameStop and other stocks with similar trading patterns.

In a recent regulatory filing, Robinhood stated that it has received information requests from federal prosecutors, the SEC, various state attorneys general, and other financial regulators over the decision to restrict trading last month on stocks including GameStop, AMC, and BlackBerry.

According to the filing, the Financial Industry Regulatory Authority (FINRA), and the SEC are also investigating Robinhood’s options trading platform and how it displays information about options trading and cash positions to its customers. Robinhood has faced criticism over how it advertises options trading after a 20-year-old man named Alexander Kearns killed himself as he thought he had incurred more than $700,000 in losses on the app. Kearns’ family has filed a wrongful-death lawsuit against Robinhood.