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This is weaseling out. The reason why people move cash into a brokerage account is because they intend to invest it at some point in future. If I intend to in
by notyourday 8y ago
This is weaseling out.
The reason why people move cash into a brokerage account is because they intend to invest it at some point in future.
If I intend to invest my coverage limit amount at some point in future but for now I'm using it as a place to dump my cash into and use it as a DDA, i absolutely fall under that umbrella.
The reason why SIPC is having a fit is because someone who is supposed to be fleecing the retail clients is also planning on fleecing those those business is fleecing retail clients.
- ineedasername 8y agoThe reason why people move cash into a brokerage account is because they intend to invest it at some point in future. This is the problem. Robinhood is marketing the product to people who have no intention of investing. You're taking a very conspiracy-theory view of the situation. If there were an agenda to maliciously over-regulate Robinhood, it could have been executed well before this point. The fact is that Robinhood was trying to introduce a novel product that doesn't neatly fall into pre-existing categories that benefit from insurance protection. (It's great they're trying this-- I hope it succeeds!) But they appear to have done this without contacting SIPC. Had they done so up front (as they're now doing) they probably could have massaged the marketing and legal details appropriately (as I expect they will do).