Published in


Find A Fine 👨‍⚖️

The Securities and Exchange Commission is tasked with regulating the securities market and protecting investors. This time around, the SEC is protecting investors from well-known trading platform Robinhood for misleading its customers about how the company makes money.

Following the charge of deceiving customers and failing to deliver the promised best executions of trades, the company agreed to pay a $65 million civil penalty, without admitting or denying SEC’s findings. According to a Robinhood’s lawyer the practices “do not reflect Robinhood today.”

The SEC release a statement saying, “Between 2015 and late 2018, Robinhood had misleading statements and omissions in customer communications, including in FAQ pages on its website, about its largest revenue source when describing how it made money — namely, payments from trading firms in exchange for Robinhood sending its customer orders to those firms for execution, also known as “payment for order flow”.

As a pioneer of “commission-free trading”, the online brokerage relies on payment for order flow as their main revenue stream. It is indeed a controversial practice but is in fact legal. What happens is Robinhood’s customers’ orders are then executed at prices that are inferior to other brokers, according to the report.

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

Originally published at on December 18, 2020.




Financial insights and news to helping educate investors. We deliver content from market leaders, academics, investors and more who are keen to share their intelligence on the latest business developments.

Recommended from Medium

Green Bull — A decentralized social community experiment

Centaurify contracts — Internal business decision after audit

Bitcoin and its long term hype

Playable Aavegotchi NFTs find their Ethereum home on with $RARI rewards program

what i have been waiting for has come !

February 27th 2022, Gold Chartbook — Strong reversal should lead to another leg up

The significance of diversification in the crypto realm.

What is crypto skating ? How it works, and how go get started.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store


Build confidence, and invest with knowledge. Play, learn, & invest on the Invstr app today! Available on iOS and Android.

More from Medium

Stock Indicators — let’s get a glimpse

Trading or Investing: Which one is for you?

Slight Recovery in the market. Another Day.

Trading Forex With The Trendlines