SEC charges Robinhood $65M for misleading customers about revenue sources
The fact that Robinhood routed to these wholesalers was always easy to see... it’s in their SEC rule 606 reports.  This info was buried deep on their site, but you can alway use a search engine to find it.  You just had to know where to look.<p>They took payment for order flow (PFOF). So do many of the cheap brokerages on the street.<p>To me, the funny part is that the old school wall st institutions Robinhood is supposedly disrupting do not take payment for order flow.  Morgan Stanley and Merrill will not take it.  They go for the best execution quality always.<p>Although, I do not agree that this practice is necessarily illegal... there’s a simple argument to make: by taking payment over price improvement the broker is able to provide a lower commission.  The all in price could still be better for the customer.  Robinhood is not skilled enough to navigate this issue though.<p>From a guy that used to run best ex at a wall st firm...