Finance Breaking news SEC fines Robinhood $65m over trade dealings last financial news

Breaking-Finance.Com - Stock trading app Robinhood has been hit with a $65 million fine by the Securities and Exchange Commission for misleading customers about payment for order flow practices that cost traders over £34 million in lost gains, the latest in a series of damning complaints about the firm's business tactics.

Finance Breaking news SEC fines Robinhood $65m over trade dealings last financial news

Breaking-Finance.Com - Stock trading app Robinhood has been hit with a $65 million fine by the Securities and Exchange Commission for misleading customers about payment for order flow practices that cost traders over £34 million in lost gains, the latest in a series of damning complaints about the firm's business tactics.

Finance Breaking news SEC fines Robinhood $65m over trade dealings last financial news
17 December 2020 - 14:45

Breaking-Finance.Com - Stock trading app Robinhood has been hit with a $65 million fine by the Securities and Exchange Commission for misleading customers about payment for order flow practices that cost traders over £34 million in lost gains, the latest in a series of damning complaints about the firm's business tactics. According to the SEC’s order, between 2015 and late 2018, Robinhood made misleading statements in customer communications about its largest revenue source - payments from trading firms in exchange for Robinhood sending its customer orders to those firms for execution. As the SEC’s order finds, one of Robinhood’s selling points to customers was that trading was “commission free,” but due in large part to its unusually high payment for order flow rates, Robinhood customers’ orders were executed at prices that were inferior to other brokers’ prices. Despite this, according to the SEC’s order, Robinhood falsely claimed in a website FAQ between October 2018 and June 2019 that its execution quality matched or beat that of its competitors.

.1 million even after taking into account the savings from not paying a commission.“Robinhood provided misleading information to customers about the true costs of choosing to trade with the firm,” says Stephanie Avakian, director of the SEC’s Enforcement Division. “Brokerage firms cannot mislead customers about order execution quality.”The SEC's actions come hard on the heels of a complaint filed by Massachusetts securities regulators yesterday accusing the trading app of using aggressive tactics to attract inexperienced investors, employing strategies such as gamification to entice continuous use of its service, and of failing to prevent outages on its platform.

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Finance Breaking news SEC fines Robinhood $65m over trade dealings last financial news


Finance Breaking news SEC fines Robinhood $65m over trade dealings last financial news


Finance Breaking news SEC fines Robinhood $65m over trade dealings last financial news


Finance Breaking news SEC fines Robinhood $65m over trade dealings last financial news

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