June 5, 2021
Hi, hope this message finds you well,
Thank you for giving me (and others) the opportunity to comment on the Robinhood litigation currently underway.
I firmly believe that the monetary sum that Robinhood is required to deposit is an incredible understatement of the damage to retail investors, that the company has inflicted.
If we take a look at Robinhood's payment for order flow revenue, we can observe that Robinhood has earned 331,000,000 USD during Q1 2021 Alone.
The ADMINISTRATIVE PROCEEDING File No. 3-20171 document states that the goal is to provide reimbursement for False Misleading disclosures starting in 2016.
Given that Robinhood's \"ill gotten gains\" from PFOF in Q1 2021 alone exceed the litigation amount of 65,000,000$ by a factor of 5, I believe that the monetary sum that Robinhood is being required to pay is laughably small.
In fact - if Robinhood had properly disclosed their PFOF model and the inherent conflict of interest in this model - I am sure a lot of individual investors would have refused to participate. Robinhood has made an immense amount of money from, what is in essence \"lying and cheating\". A fine of 65,000,000$ is negligible, and constitutes a \"slap on the wrist\" and can be written off as a \"cost of doing business\".
As a young investor in the US markets, I want to believe that they are regulated fairly, and that bad actors are punished accordingly. While I am glad that the SEC is finally taking action against bad actors such as Robinhood, I nonetheless believe that the punishment is an order of magnitude below where it should be.
I would like to ask the SEC to make a public example out of Robinhood, as well as to further look into the issue of the January prohibition on buying, but not selling certain securities, which, in my opinion, constitutes market manipulation by Robinhood. I understand that this time period is not included in this litigation, but I think it should be.
Keeping with the tradition of Reddit - a website that informed me of the possibility to comment -
TLDR: The fine is too small, please don't just throw the book at Robinhood, throw the entire library at them. Then - move on to prosecute them (and other brokers) for blatant market manipulation during the January gamma squeeze of the so called \"meme stocks\".