Will this kill their public offering?
Definitely not.
SEC charges Robinhood $65M for misleading customers about revenue sources
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Re: SEC charges Robinhood $65M for misleading customers about revenue sources
#12This is probably why VC's have historically shied away from heavily regulated industries. It's just too easy for " insanely ambitious" founders to run afoul of the rules and laws. Fortunately for AirBnB, these rules and laws weren't enforced all that often.
Re: SEC charges Robinhood $65M for misleading customers about revenue sources
#13I know this may be a slap on the wrist for Robinhood, but honesty the SEC is one of the branches of government that I trust almost as much as the FDA. I appreciate the work they do and I hope they continue it.
Does this cut them off from their revenue source? That would seem a bigger issue for them than the fine.
They only cost customers $35kk in execution compared to other brokers. I suspect they will take a hit in revenue, but the order routing will still be valuable.
Re: SEC charges Robinhood $65M for misleading customers about revenue sources
#14I know this may be a slap on the wrist for Robinhood, but honesty the SEC is one of the branches of government that I trust almost as much as the FDA. I appreciate the work they do and I hope they continue it.
Does this cut them off from their revenue source? That would seem a bigger issue for them than the fine.
AFAIK payment for order flow is legal, and most of the other brokers do it as well.
Re: SEC charges Robinhood $65M for misleading customers about revenue sources
#15If 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?
I believe they could still be sued for these damages
Re: SEC charges Robinhood $65M for misleading customers about revenue sources
#16If 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 can't provide retribution to customers. That's a job for the courts.
Re: SEC charges Robinhood $65M for misleading customers about revenue sources
#17If 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?
The sad truth of this is that this is just three letter agencies doing as three letter agencies does. I don't think anyone at the SEC was looking after consumers here. If they were, they would similarly investigate other brokerages with the same practices (which is many).
Re: SEC charges Robinhood $65M for misleading customers about revenue sources
#18This is probably why VC's have historically shied away from heavily regulated industries. It's just too easy for " insanely ambitious" founders to run afoul of the rules and laws. Fortunately for AirBnB, these rules and laws weren't enforced all that often.
This is inaccurate. Some of the most successful startups in recent memory made their bankroll by skirting regulations. It eventually catches up to them, but by then they've made a decent sized war chest to comply and plow forward. Eventually the startup just becomes the next established player. Rinse and repeat.
Re: SEC charges Robinhood $65M for misleading customers about revenue sources
#19If 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?
I don't know the answer in this specific case, but often in the case of small rewards like this, it's because administering the return of the money would consume a large fraction of it.
Re: SEC charges Robinhood $65M for misleading customers about revenue sources
#20This is probably why VC's have historically shied away from heavily regulated industries. It's just too easy for " insanely ambitious" founders to run afoul of the rules and laws. Fortunately for AirBnB, these rules and laws weren't enforced all that often.
In AirBnB's case were there actually any preexisting rules? It would seem strange to have rules in place governing short term rentals before there was really even a market for that.