June 28, 2021
I'm glad the SEC is looking into Robinhood's questionable business practices. Robinhood was one of the first places I started to invest with because of the free commissions but at the time I had no idea of the hidden costs. I would notice oddities with Robinhood here and there where trades that should have gone through didn't or fill prices would be further off then I thought I would pay at. As a novice I had no idea if this was normal and you can't easily tell what is going on just from a mobile app. When transactions are completed in milliseconds its very easy to brokers and intermediaries to scalp trades without investors knowing what they lost.
I would like to see a breakdown of how the SEC found Robinhood cost their customers 34.1 million and does this lose include the actions of the companies such as Citadel trading based on the order flow data they buy from Robinhood? If it does not I ask the SEC to look into how much companies like Citadel profited with this information and fine them for every penny they stole from retail investors.
I hope in the future the commission will consider banning payment for order flow like Canada and the United Kingdom.