Robinhood and Fidelity Face Allegations of Illegal Naked Short Selling Amid Platform Expansion

Robinhood and Fidelity have come under scrutiny following allegations of participating in illegal naked short selling, prompting both platforms to halt buy orders for Genius Group as the company prepares to pursue legal action. The accusations have sparked concern among investors, with some Robinhood users reporting technical issues such as stuck orders and reference ID errors during trading.

Despite the controversy, Robinhood continues to expand its product offerings. The company recently announced the launch of new trading features, including staking for Ethereum ($ETH) and Solana ($SOL) for U.S. customers, and the development of Robinhood Chain on Arbitrum, aimed at enhancing asset ownership and blockchain integration. Additionally, Robinhood has rolled out mobile access to its Legend charts, which now feature live candlesticks and direct trading capabilities.

In a notable move into the real estate sector, Robinhood is exploring mortgage services through a partnership with Sage Home Loans. The offering includes mortgage rates at least 0.75% lower than the national average and a $500 credit toward closing costs for qualifying customers, with no asset minimum required. This initiative is part of a broader strategy to diversify Robinhood’s financial services portfolio and attract new customers.

Meanwhile, Robinhood has introduced a tiered margin rate structure, now offering the lowest rates among leading brokerages, ranging from 5.7% to 6.75% depending on the customer’s margin balance. These changes are designed to appeal to both new and advanced investors, further positioning Robinhood as a comprehensive financial platform.

The company’s rapid expansion and product innovation come at a time of heightened regulatory and legal scrutiny, with the outcome of the naked short selling allegations likely to impact investor confidence and the broader trading landscape.