Tag:

Robinhood

Robinhood Fined $65 Million for Misleading Customers

On December 17, 2020, the Securities and Exchange Commission (“SEC”) charged Robinhood Financial, LLC (“Robinhood”) with material misrepresentation and misleading its users about its revenue sources, specifically Robinhood’s receipt of payments from certain principal trading firms for routing its customer orders to them. The SEC charges against Robinhood also relate to certain statements about the execution quality Robinhood achieved for its customers’ orders and Robinhood’s failure to satisfy its duty of best execution. Robinhood agreed to pay $65 million to settle the charges.

Bitcoin, Tesla, and GameStop: Regulatory Challenges Posed by the New Retail Investor

GameStop started 2021 with a stock price below $20 but saw its stock price skyrocket to well above $300 a share towards the end of January.  The rally would be hard to explain by solely relying on the company’s financial reports or underlying fundamentals.  Instead, the rally has to be explained through a combination of external factors involving a popular fintech company’s app, manic speculation by retail investors, and Reddit.  Although at first glance this may seem like a new phenomenon, the same factors have been at play for years with a huge interest in Tesla and Bitcoin – and they pose a risk to the markets that regulators and Wall Street together can’t ignore.