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SEC charges Robinhood $65M for misleading customers about revenue sources

sec.gov

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Re: SEC charges Robinhood $65M for misleading customers about revenue sources

#81

Post by ehejsbbejsk »

cj wrote: post #59
ehejsbbejsk wrote: post #55

I believe this is to punish RH for offering zero commissions. Especially on options. I seriously think what RH offers, for anyone who’s traded options on the retail side, is a game changer.

Sometimes what's good for the 1 person isn't good for everyone. For example, if a bank starts giving out 0% interest 100 year mortgages (with some fine print that gives them some obscure revenue source to make it possible for them to make such an appealing offer) the bank should still get in trouble in my opinion if the consumer isn't informed about how they're getting such an amazing deal, because you're removing th…

I know what you want to say but that’s an awfully bad example. I would take out that loan 10 times over.

Re: SEC charges Robinhood $65M for misleading customers about revenue sources

#82

Post by gamerDude »

VWWHFSfQ wrote: post #31
gamerDude wrote: post #6

If the SEC has gone through and has accounted for the 34 million in cost to consumers, why are they not having robinhood reimburse the customers for their lost money on the trades and then charging the additional 30 million on top for lying? Why does the SEC take all the money?

SEC doesn't work on behalf of consumers, it works on behalf of the federal government. Robinhood customers are still free to bring lawsuits against the company and those would be heard in courts.

Got it, so, in theory this sets the groundwork for a class action lawsuit?

Re: SEC charges Robinhood $65M for misleading customers about revenue sources

#83

Post by gen3 »

d33lio wrote: post #56

They deserve every single bit of this. Please use a real reputable broker / platform like Schwab. Sure, they don't have a mobile app - but they also don't sell your trading info to front-runners, actively manipulate the charts they show you to influence your decisions and let their platform crash and just tell you "thats how things go". edit - I didn't realize Youtuber RH fanboys read hacker news...

Just FYI, Schwab does have a mobile app. I don’t like the vertical charting as much as Robinhood, but you can still trade stocks and options through it. If you want to trade bonds or some of the more exotic stuff you need the website.

Re: SEC charges Robinhood $65M for misleading customers about revenue sources

#84

Post by simias »

phillnom wrote: post #24
plouffy wrote: post #9

Earlier quoted context omitted.

He/She does.

I didn't downvote but wanted to suggest just using "they" when you don't know.

Correcting people when they use wrong pronouns is distracting but I get it, but can we at least not correct people for not using the right variety of neutral pronouns?

Re: SEC charges Robinhood $65M for misleading customers about revenue sources

#86

Post by eru »

ehejsbbejsk wrote: post #55

I believe this is to punish RH for offering zero commissions. Especially on options. I seriously think what RH offers, for anyone who’s traded options on the retail side, is a game changer.

Alas, for most people, especially retail and even more especially options, it's better if they trade less.

Re: SEC charges Robinhood $65M for misleading customers about revenue sources

#87

Post by eru »

whimsicalism wrote: post #73
eru wrote: post #70

Earlier quoted context omitted.

Nobody forced you to sign up with them.

I haven't. But there are obvious power dynamics when large market actors can get people to waive their right to sue. There's a reason they're called "inalienable." They're not supposed to be self-alienable either.

I don't think the right to sue is inalienable.

Re: SEC charges Robinhood $65M for misleading customers about revenue sources

#88

Post by _cs2017_ »

ELI5: why exactly did the clients get bad execution?

Does sending order flow to trading firms in itself cause unfavorable execution?

Or did the trading firms treat order flow from RH differently than from other sources?

Or is it something else?

And does the fact that RH was receiving large payments for order flow impact the quality of execution?

Re: SEC charges Robinhood $65M for misleading customers about revenue sources

#90

Post by eru »

EvanKelly wrote: post #76
eru wrote: post #67

Earlier quoted context omitted.

What's perhaps a bit weirder is that the SEC is allowed to settle, instead of having to go through the judicial system.

Why is that weird? Attorneys in this are working on behalf of the US Government. If they feel like settling gets the best deal for the government, then they do that.

Going before a proper judge would ensure proper procedures are followed and proper precedent is set.

What they do reminds me way too much of https://digitalcommons.law.yale.edu/fss_papers/543/

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