WSJ: Robinhood facing SEC investigation over dealings with high-frequency trading shops

Popular millennial stock and options brokerage is said to be under civil fraud investigation into its failure to properly disclose how it routes client orders to high-frequency trading shops, according to The Wall Street Journal. 

Per the report, the investigation — conducted by the Securities and Exchange Commission — is in an "advanced stage" and could result in a $10 million fine. Robinhood makes a good portion of its revenues through a practice known as payment for order flow. Under a PFOF deal, a broker will sell off client order flow to high-speed traders like Citadel Securities, which internalizes and matches the orders. 

A deal could be announced this month and "the two sides haven't formally negotiated a proposed fine," according to the Journal.

Robinhood has previously been slapped with fines relating to its order routing practices. At the end of 2019, FINRA announced  a $1.25 million fine against Robinhood for improperly routing orders.