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No, much more than $34M in misbehavior. Hurt customers by $34M over what they would have been charged if they had paid commissions. So Robinhood took money fro
by jellicle 6y ago
No, much more than $34M in misbehavior. Hurt customers by $34M over what they would have been charged if they had paid commissions.
So Robinhood took money from its customers to this extent: all the cash as if its customers were paying commissions, and also $34M, and for that they're being fined $65M, which will probably be negotiated down to $2M or something like that.
- notfbi 6y agoThe 34 million calculation is only for "certain" orders. I think this means some trades would be advantageous under the RH model (small trades where a $5 fixed commission would overwhelm any percentage), some trades would be disadvantageous under the RH model (very large value trades), and they only summed the comparative fees on the disadvantageous trades. This might make sense: if users were knowledgeable and had multiple brokers, they may execute at the better trade-specific broker for each trade, so adding up just the potential bads gives some perspective. But on the other hand, it's not a perfect indicator for Robinhood's net gain as its omitting trades where Robinhood's structure leads to lower commission.