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”
FINRA Orders Record Financial Penalties Against Robinhood Financial LLC
Firm Ordered to Pay Approximately $70 Million for Systemic Supervisory Failures and Significant Harm Suffered by Millions of Customers
WASHINGTON—FINRA announced today that it has fined Robinhood Financial LLC $57 million and ordered the firm to pay approximately $12.6 million in restitution, plus interest, to thousands of harmed customers. The sanctions represent the largest financial penalty ever ordered by FINRA and reflect the scope and seriousness of the violations. In determining the appropriate sanctions, FINRA considered the widespread and significant harm suffered by customers, including millions of customers who received false or misleading information from the firm, millions of customers affected by the firm’s systems outages in March 2020, and thousands of customers the firm approved to trade options even when it was not appropriate for the customers to do so.
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GameStop Short Sellers Flee As Short Interest Drops By $880 Million In 2 Weeks
Ramish Zafar, 30 June 2021
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.
This practice, considered illegal after the subprime crisis in 2008, consists of borrowing shares to sell short, but without these shares existing. This is only possible in the very short term and due to technical loopholes in trading, as transactions take days to clear the system. Continue reading “Article: GameStop Short Sellers Flee As Short Interest Drops By $880 Million In 2 Weeks”
Amazon Got Some Warrants
Matt Levine, 30 June 2021
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
I am a simple man and to me this seems good. Buy a thing, create good news for the thing, announce that news, watch the price of the thing go up. In general I think it is under-utilized, as a strategy. You don’t hear stories about, like, Moderna Inc. running a successful trial of its coronavirus vaccine and buying a ton of call options on cruise lines and airlines before announcing the news. That would have been a good trade! Continue reading “Article: Amazon Got Some Warrants”
Companies House, my virtual Russian squatter and me
CYNTHIA O’MURCHU , 30 June 2021
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 trouble is, it’s not true. We have never heard of “the Russian”. But evicting our virtual squatter turned out to be complex — and costly.
Trawling through public records is the backbone of my work as I follow global money flows searching for evidence of financial fraud or accounting acrobatics. So I’m aware that records at the UK corporate registry, Companies House, contain errors and lies. Continue reading “Article: Companies House, my virtual Russian squatter and me”
Department of Justice Begins Third Distribution of Forfeited Funds to Compensate Victims of Fraud Scheme Facilitated by Western Union
Department of Justice, 30 June 2021
The Department of Justice announced today that the Western Union Remission Fund began its third distribution of approximately $66 million in funds forfeited to the United States from the Western Union Company (Western Union) to approximately 6,000 victims located in the United States and abroad. These victims, many of whom were elderly victims of consumer fraud, will be recovering the full amount of their losses.
This is the third in a series of distributions. The first two distributions paid more than $300 million to over 142,000 victims, all of whom received full compensation for their losses. The Department of Justice anticipates authorizing compensation for more victims in the coming months. Petitions are accepted on an ongoing basis and potential victims who have not applied for compensation will be provided the opportunity to apply this year. Continue reading “Article: Department of Justice Begins Third Distribution of Forfeited Funds to Compensate Victims of Fraud Scheme Facilitated by Western Union”
Honoring the Unifying Power of National Symbols, #UNRIG Rolls on to Mount Rushmore July 4th
Are you tired of abuse at the hands of a tyrannical, unrepresentative, rapacious federal government? So were the Founders, and so is #UNRIG founder and retired CIA operative Robert Steele! Join the #UNRIG movement on Independence Day at Mount Rushmore to reclaim political control over your own community from authoritarians in far-off lands.
Continue reading “Article: Honoring the Unifying Power of National Symbols, #UNRIG Rolls on to Mount Rushmore July 4th”
What’s Behind The Massive Fluctuation In Natural Gas Prices?
Irina Slav, 30 June 2021
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.
“I cannot for the life of me understand how we saw it go from $2 to $1,200 and back down to $2 in the span of the week; that’s not real,” Garry Mize, the Republican chairman of the utilities committee in Oklahoma’s House of Representatives, said recently, as quoted by the Wall Street Journal. Continue reading “Article: What’s Behind The Massive Fluctuation In Natural Gas Prices?”
EU bond sales run by four banks previously suspended for antitrust
ishwarkimmins, 29 June 2021
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.
JP Morgan, Crédit Agricole, Deutsche Bank and UniCredit were banned from participating in the first € 20 billion debt sale to fund the EU’s € 800 billion recovery fund earlier this month due to past antitrust violations. It was one of only 10 lines. Continue reading “Article: EU bond sales run by four banks previously suspended for antitrust”
AMC is Now Designated by NYSE as a ‘Threshold Security’
Tim Fries, 29 June 2021
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.
Yesterday, the Tokenist reported on another tie-in to the great short squeeze saga. Both TD Ameritrade and Schwab brokers announced their increased margin trading requirements to reduce the risk for themselves and for traders who wish to engage in the trading of the two mega-shorted stocks – GME and AMC. As these stocks already drained $12 billion from hedge funds, all market players are fortifying their financial walls. Continue reading “Article: AMC is Now Designated by NYSE as a ‘Threshold Security’”
How to conquer synthetic identity fraud
Carey O’Connor Kolaja, 29 June 2021
“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.”
Synthetic fraud is today’s fastest-growing type of financial crime. To make matters worse, up to 95% goes undetected by regular fraud models, as these actors behave, act and look like regular customers that neither the human eye nor highly complex computer vision methods would have detected. Continue reading “Article: How to conquer synthetic identity fraud”