Robinhood fined USD 1.25 million

Maverick2608 · Dec 19, 2019

Robinhood fined $1.25MM for allowing four broker dealers to frontrun orderflow. The CEO of one of Robinhood's brokers just bought a quarter billion dollar penthouse in NYC.

Robinhood has now surpassed 10 million accounts.

Makes zero sense.

IAS_LLC · Dec 19, 2019

What doesn't make sense?

Cuddles · Dec 19, 2019

IAS_LLC said:
What doesn't make sense?

financial lobbyist writing policy

Overnight · Dec 19, 2019

I thought Robinhood was a broker? What is difference between broker, and broker-dealer?

dinn13 · Dec 19, 2019

Overnight said:
I thought Robinhood was a broker? What is difference between broker, and broker-dealer?

Robinhood is a broker-dealer

https://brokercheck.finra.org/firm/summary/165998

Overnight · Dec 19, 2019

dinn13 said:
Robinhood is a broker-dealer

https://brokercheck.finra.org/firm/summary/165998

So Robinhood is also a bank then. I did not know this.

Maverick2608 · Dec 20, 2019

IAS_LLC said:
What doesn't make sense?

That clients open more than 10 million accounts when Robinhood offer no advantages.

IAS_LLC · Dec 20, 2019

They offered "free" trades before anyone else

Nobert · Dec 20, 2019

It's like, they did that consciously, and all there is 1,25 Mil ?

It's more a warning , than an actual fine.

The fine should be of a size, that would cripple them.

10 - 30 - 50 mils.

Next time would think twice.

schizo · Dec 20, 2019

Maverick2608 said:
Robinhood fined $1.25MM for allowing four broker dealers to frontrun orderflow. The CEO of one of Robinhood's brokers just bought a quarter billion dollar penthouse in NYC.

Robinhood has now surpassed 10 million accounts.

Makes zero sense.

I've always thought the latest "free trade" craze was about selling the customers' order flow to the middle man (eg. broker dealer "front running" your order). So what is considered to be wrong with frontrunning the orderflow?