Robinhood’s Luster Stained Again With a Record $70 Million Fine
Annie Massa and Benjamin Bain, 30 June 2021
Robinhood Markets Inc. unleashed a revolution, marshaling throngs of new traders to financial markets in an upside-down year. But the free trading app’s breakneck growth hurt the same small-time investors it sought to empower.
That’s the accusation leveled by Wall Street’s self-funded watchdog, which extracted almost $70 million from the brokerage in a record settlement Wednesday, including a $57 million fine and about $12.6 million in payments to aggrieved customers. It follows Robinhood’s meteoric rise against the backdrop of the Covid-19 pandemic and the frenzy over hot stocks such as GameStop Corp. that warped the realm of retail trading. Continue reading “Article: Robinhood’s Luster Stained Again With a Record $70 Million Fine”
Reddit forum discussions and coordinated trades have been rooted in the community’s disdain for so-called “toxic market participants”. These toxic players tend to be hedge funds and a few others on Wall Street who make sizable bearish bets against certain stocks through naked shorting.
A recurring theme of this column is that if you have the power to make the price of a financial asset go up, you should (1) do that but (2) buy a lot of it first. So for instance Tesla Inc. is a big company and its chief executive officer, Elon Musk, is a famous influential guy with a lot of Twitter followers. So when Tesla announced that it would start accepting Bitcoin as payment for its cars, the price of Bitcoin went up. This was very predictable. So what did Tesla do? It bought $1.5 billion of Bitcoin before announcing the news, and then Bitcoin went up and it had an immediate gain. 1
If Britain’s company registry is to be believed, my family and I have been sharing our dwelling with a Russian in his mid-forties. For a time, our place doubled as an office for his start-up, which he set up last year, and in which he is the sole shareholder.
The Texas Freeze was one of those unprecedented events that have the potential to upend the way things are done, in this case, in power utilities. The crisis, which saw natural gas prices rise from two-figure to four-figure numbers, prompted an in-depth look at Texas’s grid and electricity market, and measures to ensure it never happened again. Now, gas prices are on the rise again, and many of the February bills have not been paid yet. Disgruntlement is building up across the swathe of states affected by the freezing cold spell in February. In California, people are being warned their bills are going to rise higher.
As Brussels sold its new five- and thirty-year debt, four banks that had previously suspended EU bond sales were selected to manage Block’s latest trading on Tuesday.
The more one zooms into the stock market’s underpinnings, the more surreal it gets. Today, the NYSE has designated AMC as a ‘threshold security’, shining further light onto the situation with AMC shares that fail to deliver.
“No single organization can stop synthetic identity fraud on its own,” reports The Federal Reserve. “Fraudster tactics continually evolve to stay a step ahead of detection—and the most sophisticated fraudsters can operate at scale in organized crime rings, generating significant losses for the payments industry. It is imperative that payments industry stakeholders work together, share information and keep up with the threat.”