Hot news about Cryptocurrencies
For updates and exclusive offers, enter your email address.
Home » Beginners » What Is Masternodes: The List Of Coins

Robinhood “Helps The Rich Earn The Poor”


FINRA experts fined Robinhood's investment application a fine of $ 1.25 million. 

According to the FINRA, the startup did not comply with the requirements to ensure conditions for the best execution of orders from 2016 to 2017. The company sent the securities listed on the NYSE Exchange, the transactions with which its clients conducted, for processing to broker-dealers. The list includes such companies as Citadel, Two Sigma, and Virtu. The latter was engaged in conducting warrants. According to the regulator, the conditions provided by dealers were not beneficial for startup users.

The rules established by FINRA require market participants to identify the best conditions for working with securities. The total transaction value for the user should be the most profitable of those on the market. An offer study should take into account current market conditions. Failure to ensure proper order execution requirements is the reason for the investigation and the imposition of punishment.

Crypto community drew attention to the fact that such manipulations explain the success of broker-dealers working with Robinhood. Others noted FINRA's performance by contrasting the organization of the US Securities and Exchange Commission (SEC). Also, users appreciated the irony of the situation - Robinhood "stealing from the poor and giving to the rich."

How Will Robinhood Rectify The Situation?

Paying a fine is not the only measure Robinhood used to resolve the conflict. The startup team also involved special software. The latter will allow us to analyze the quality of execution of orders. The software was provided by an independent vendor. Also, the Robinhood team was supplemented by a manager whose task will be to control troubleshooting. In addition, an independent consultant will record improvements to the startup.

Attempts to justify the situation did not reduce the degree of aggression in the network. At the same time, commentators noted that the startup’s actions helped enrich brokers.

Recall that earlier the Robinhood team presented the possibility of fractional investment, thanks to which users can invest any amount in the shares of large companies.