Robinhood, the online retail trading company that was once fined millions of dollars in legal settlements, launched a media outlet Tuesday.
The online retail trading company’s new outlet, Sherwood News, will serve as a subsidiary, Axios reported. Editor-in-chief Joshua Topolsky began hiring journalists last year after Robinhood acquired U.K.-based Chartr Limited in December to bolster the new outlet’s products and visualization, according to Axios. It intends to publish original stories regarding business, cryptocurrency, personal finance, markets and culture.
Exclusive: @Robinhood today has officially launched its new media arm @sherwoodmedia
— Its popular Snacks newsletter is getting a rebrand
— Company has hired roughly three dozen people — nearly two dozen journalists
https://t.co/rztSXzp1av— Sara Fischer (@sarafischer) April 9, 2024
Topolsky said the company currently has about three dozen employees and intends to increase that number to around 40 full-time staff by the end of the year, according to Axios. Journalists are reportedly not prohibited from covering the company, as the outlet is editorially independent.
Media outlets have appeared to have little success in building businesses independent from their parent company, including the non-profitable Bloomberg Media and Penn National, which sold Barstool Sports back to its founder Dave Portnoy in August.
Robinhood was previously fined $70 million in penalties for its systemwide outages and misleading communication practices in March 2020, CNBC reported in June 2021. FINRA, a self-regulating organization overseeing brokerage firms, fined Robinhood $57 million and ordered the company to pay $13 million to compensate its clients. (RELATED: Robinhood Made Nearly $70 Million By Selling User Data To Hedge Funds)
The outages left clients unable to trade cryptocurrency and equities, CNBC reported.
“Robinhood has invested heavily in improving platform stability, enhancing our educational resources, and building out our customer support and legal and compliance teams,” Robinhood head of public policy communications Jacqueline Ortiz Ramsay said in regards to the matter. “We are glad to put this matter behind us and look forward to continuing to focus on our customers and democratizing finance for all.”
At the height of the backlash, the company was making nearly $700 million by selling information about user transactions, also known as “order flow,” to third-party clients such as hedge funds, who ultimately would execute trades made on the platform.
Order flow has accounted for the vast majority of Robinhood’s quarterly earnings. The company earned roughly $675 million in revenue from payments for order flow, according to quarterly revenue data compiled by The Box.
FINRA fined Robinhood $1.25 million in 2019 for best execution violations, CNBC reported.