Massachusetts' top securities regulator reportedly has begun a survey of Robinhood about the recent decision of the popular trading platform to launch an in-app forecast market hub that allows customers to bet on the outcome of events, including multi-madness matchups.
According to a report from Reuters on Monday, Massachusetts Secretary of State – well-known offensive regulator Bill Galvin sent a subpoena last week asking Robinhood to exchange university sporting event contracts and asking for information on the number of Massachusetts users seeking copies of Robinhood's related marketing materials.
“This is another gimmicks from a company where Gimmicks is very good, and it helps keep investors away from sound investments,” Galvin told Reuters. Garvin's office confirmed the investigation into Koindsk, adding that Robinhood's response to the subpoena is scheduled for April 3.
The Calci-regulated forecast market for Robinhood, regulated by the Commodity Futures Trade Commission (CFTC), launched on March 17th with a madness-related event agreement and is linked to the target Fed fund ratio cap for May. At the time of the launch, Robinhood told Coindsk that he had been in communication with the CFTC “the last few weeks” before it reached its launch.
A spokesman for Robinhood reiterated that event contracts offered through the forecast market hub were “regulated by the CFTC and provided through CFTC registration entities.”
“The forecast market is becoming increasingly important to retail and institutional investors, and we are proud to be one of the first platforms to provide these products to retail customers in a safe and regulated way,” the spokesman added.
The trading platform previously tried to launch a hub for forecast markets in February ahead of the Super Bowl, but delayed launches in response to CFTC's demands.
