Robinhood Open to Reviewing Arb Policy, It Tells Sen. Warren

Stated Warren: "Secretive arbitration processes deny customers a fair hearing, undermine public accountability, and hamper efforts to assemble a thorough and complete understanding of events."

Warren asked Robinhood how many consumer complaints it has "fielded from customers that were required to use the arbitration process to address their concerns."

Stated Moskowitz in his letter: "Under the operative customer agreement and consistent with FINRA regulations, all RHF customers agree to adhere to the terms of the pre-dispute arbitration clause."

As of Feb. 11, he said, "there are 24 arbitrations pending."

Robinhood Financial, Moskowitz stated, "is open to reviewing its use of arbitration and will continue to be guided by what is in its customers' best interests with respect to resolving customer complaints."

Warren stated that while she hopes "Robinhood follows through on its statement that it is open to reviewing its use of forced arbitration, the SEC should ban these harmful and exploitative clauses outright."

Robinhood's response to her letter, Warren continued, "reveals that the company did not have enough cash on hand to manage a surge in trading and buried important information about consumers' rights. Robinhood promised to democratize trading, but hid information about its prerogative to change the rules by cutting off trades without notice — and about customers' inability to access the courts if they believe they've been cheated — behind dozens of pages of legalese."

What's still not clear from Robinhood's response, Warren continued, "is the full extent of Robinhood's ties to giant hedge funds and market makers."