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#robinhoodlawsuit #RobinHood #GME
In 2018, Bloomberg news released a reported that #RobinHood received more than half of its revenue from payment for order flow
Payment for order flow is compensation a broker receives from a 3rd party seeking to influence how a broker routes
In 2018, Bloomberg news released a reported that #RobinHood received more than half of its revenue from payment for order flow
Payment for order flow is compensation a broker receives from a 3rd party seeking to influence how a broker routes
client orders for fulfillment. A "kickback" system by another name
After #Robinhood confirmed that to be true, the WSJ found that Robinhood was "taking more cash for orders than rivals" by up to a 60-to-1 ratio. For failing to provide customer with the best price per order
After #Robinhood confirmed that to be true, the WSJ found that Robinhood was "taking more cash for orders than rivals" by up to a 60-to-1 ratio. For failing to provide customer with the best price per order
Robinhood was fined $1.25m by FINRA in 2019.
In December of last year, Robinhood was sued in a class action suit for failing to disclose that a large portion of its revenue came from payment for order flow.
Shortly before that, in September of 2020, the WSJ reported
In December of last year, Robinhood was sued in a class action suit for failing to disclose that a large portion of its revenue came from payment for order flow.
Shortly before that, in September of 2020, the WSJ reported
that Robinhood was again under investigation for failing to fully disclose selling clients' orders to high-speed trading firms. Robinhood paid a $65M settlement on December 17, 2020.
But who does #Robinhood use for order flow?
But who does #Robinhood use for order flow?
Enter Citadel Securities
Citadel is an American multinational hedge fund and financial services company. The company operates two primary businesses: Citadel, one of the world's largest alternative asset managers and Citadel Securities, one of the leading market makers
Citadel is an American multinational hedge fund and financial services company. The company operates two primary businesses: Citadel, one of the world's largest alternative asset managers and Citadel Securities, one of the leading market makers
Why is Citadel important?
Citadel along with Point72 have backed Melvin Capital (the hedgefund at the center of the #GME run) with $2.75B to help bolster Melvin's losses. Were the short squeeze to continue unhindered, Citadel et al stand to lose billions
Citadel along with Point72 have backed Melvin Capital (the hedgefund at the center of the #GME run) with $2.75B to help bolster Melvin's losses. Were the short squeeze to continue unhindered, Citadel et al stand to lose billions
As the largest source of Robinhoods revenue, and the financial backer with billions at stake, today's removal of purchase options to retail investors in favor of institutional investors depicts clearly, illegal market manipulation at the behest of Citadel Securities
A class action lawsuit has been opened in SDNY and will seek to show (and likely cover) the extent of manipulation by both robinhood and Citadel https://thehill.com/policy/healthcare/536320-class-action-lawsuit-filed-against-robinhood-for-restricting-trading
