4 ms·

I've stated this before and got downvoted in other posts: RobinHood is a gambling platform. It is run fast and loose by its managers. I am glad the SEC came do

by anonu 6y ago

I've stated this before and got downvoted in other posts: RobinHood is a gambling platform. It is run fast and loose by its managers. I am glad the SEC came down on it. This is actually a very minor penalty and more like a slap on the wrist than anything else. But it shows at least that there is some scrutiny of what RH tells its customers. I have raised FINRA complaints in the past about this company for their poor order handling. I encourage anyone else to do the same when they see something wrong with RH or any other trading platform. RH needs to massively increase its controls as well as investor education. I think this penalty is also a massive day of reconing for their business model. They need to move to more of a full service broker - like all the other old-school firms. There's no money in order routing such as this. They need to boost their account size and attract higher quality users focused on investing - not gambling.

daniel-cussen 6y ago
> They need to boost their account size and attract higher quality users focused on investing - not gambling. This seems like one of those companies that can't both carry out their business and say what that business actually is. In any industry there's the official story of how it makes money--obsessing with quality is a common stated goal--and then there's the actual nitty gritty of how it gets the impression of that quality without going to all the expense.
oarabbus_ 6y ago
>Overall, Robinhood’s investors may not have been harmed by their decision. The SEC identified $34 million that Robinhood customers lost by not receiving best execution, which is much less than the money they saved by forgoing trading commissions. (That said, their losses might also be much higher. That $34 million comes only from “certain” transactions, which might be the tip of the iceberg that the SEC possessed the ability to measure.) They were, however, duped. This seems like the financial equivalent of Facebook/Google. Free to use, but you are the product the company profits off of. I'm not really seeing an issue if there is no measurable _net_ harm to the investors.
- gnopgnip 6y ago
  The authors conclusion is not reflective of the SEC findings. >certain Robinhood orders lost a total of approximately $34.1 million in price improvement compared to the price improvement they would have received had they been placed at competing retail broker-dealers, even after netting the approximately $5 per-order commission costs those broker-dealers were charging at the time. https://www.sec.gov/litigation/admin/2020/33-10906.pdf https://www.sec.gov/litigation/admin/2020/33-10906.pdf

by anonu 6y ago

daniel-cussen 6y ago

> They need to boost their account size and attract higher quality users focused on investing - not gambling. This seems like one of those companies that can't both carry out their business and say what that business actually is. In any industry there's the official story of how it makes money--obsessing with quality is a common stated goal--and then there's the actual nitty gritty of how it gets the impression of that quality without going to all the expense.

oarabbus_ 6y ago

>Overall, Robinhood’s investors may not have been harmed by their decision. The SEC identified $34 million that Robinhood customers lost by not receiving best execution, which is much less than the money they saved by forgoing trading commissions. (That said, their losses might also be much higher. That $34 million comes only from “certain” transactions, which might be the tip of the iceberg that the SEC possessed the ability to measure.) They were, however, duped. This seems like the financial equivalent of Facebook/Google. Free to use, but you are the product the company profits off of. I'm not really seeing an issue if there is no measurable _net_ harm to the investors.

gnopgnip 6y ago
The authors conclusion is not reflective of the SEC findings. >certain Robinhood orders lost a total of approximately $34.1 million in price improvement compared to the price improvement they would have received had they been placed at competing retail broker-dealers, even after netting the approximately $5 per-order commission costs those broker-dealers were charging at the time. https://www.sec.gov/litigation/admin/2020/33-10906.pdf https://www.sec.gov/litigation/admin/2020/33-10906.pdf