Robinhood agreed to pay $65 million to settle charges that it misled customers about its revenue sources, depriving them of more than $34 million over a three year period, according to a Securities and Exchange Commission statement released today.

The company was also hit with a lawsuit yesterday from Massachusetts regulators that allege the company failed to act in the best interests of its customers.

Robinhood allegedly misled and lied by omission to its customers about its "no commission" policy, implying that customers were saving money because they were not charged commissions, according to the SEC statement. Robinhood's actual trades were executed at rates much higher than competing brokerages because the company failed to negotiate the best terms, meaning that despite the lack of commission fee, customers were actually losing money on the trades compared to other brokerages, the regulators said in the complaint.

One of the primary ways that Robinhood makes money, known as payment-for-order-flow, has been long criticized by some experts as reducing the best possible outcome for customers.

"Robinhood provided inferior trade prices that in aggregate deprived customers of $34.1 million even after taking into account the savings from not paying a commission," agency representatives wrote in the statement. "Robinhood made these false and misleading statements during the time in which it was growing rapidly."

Robinhood's $65 million settlement did not confirm or deny the charges. As part of the settlement, the company also agreed to hire an independent consultant to review customer communications, policies and procedures and ensure the company is held to its claims.

"The settlement relates to historical practices that do not reflect Robinhood today. We recognize the responsibility that comes with having helped millions of investors make their first investments, and we're committed to continuing to evolve Robinhood as we grow to meet our customers' needs," said Dan Gallagher, Robinhood's chief legal officer, in a statement.