Robinhood CEO isn’t licensed with Wall Street regulator FINRA

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Vlad Tenev, the chief executive of Robinhood and public face of its fast-growing online brokerage, is not licensed by Wall Street’s largest self-regulator.

While it’s not entirely unusual for the heads of financial holding companies to lack such licenses, the news, first reported by CNN, is raising further questions about the company’s operations, which were already coming under greater scrutiny after Robinhood’s role in a recent market mania centering on the video game retailer GameStop.

FINRA, or the Financial Industry Regulatory Authority, is a nongovernment entity that regulates brokers and exchanges. The private industry group requires firms and individuals to register with it before they are allowed to trade securities.

The leaders of broker-dealer businesses are generally expected to register; FINRA rules say, “You must be registered with FINRA if you’re engaged in the securities business of your firm, which includes salespersons, branch managers, department supervisors, partners, officers, and directors.”

Robinhood points out that Tenev is the CEO of Robinhood Markets, the holding company that is the parent of Robinhood’s brokerage arms, which means he is not required to register with FINRA. The heads of Robinhood’s relevant securities-related subsidiaries, including Robinhood Financial, Robinhood’s broker-dealer arm, and Robinhood Securities, its clearing broker, have FINRA approval.

Securing a FINRA license involves passing qualification exams. The tests are designed to show a business and its leaders are financially knowledgeable and competent. Registration also allows the public to learn of any violations by that person.

Some competitors have CEOs who are FINRA licensed, but not all. It’s common in the financial services industry for broker-dealer operations to be subsidiaries of a larger holding company, as is the case with Robinhood.

Robinhood’s popularity has risen immensely since its founding in 2013. The site was a primary trading platform for many Redditors who drove up the price of GameStop, AMC Theaters, and more last week.

Regulators and policymakers have questioned whether Robinhood adequately discloses risks to traders, who might be inexperienced. Despite those concerns, Robinhood had little trouble quickly raising $3 billion last week as it scrambled to meet new capital requirements.

This year’s issues follow problems last year, when Robinhood customers were unable to conduct trades for two of the market’s most volatile days.

Editor’s note (4:40 P.M. ET): An earlier version of this article did not include comment from Robinhood, in part because Fortune inadvertently contacted the wrong organization while seeking comment. This article has been updated to include Robinhood’s comment and to provide additional context around Tenev’s licensure status.

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