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Robinhood just got fined $1.25 million by its regulator for how it executed trades — and it highlights the issues that can arise with payment for order flow

robinhood cofounders co-ceos

  • Trading platform Robinhood was hit with a $1.25 million fine by the Financial Industry Regulatory Authority on Thursday after the agency charged the brokerage with not following “best execution” practices.
  • The regulator found Robinhood routed non-directed stock orders to four broker-dealers that then paid it for the trades. The practice isn’t illegal, but Robinhood’s methods fell outside of the agency’s guidelines.
  • FINRA’s laws oblige brokerages to conduct either order-by-order reviews or implement a “regular and rigorous” review program to ensure users are getting the best prices and trade execution speed possible.
  • Robinhood has since improved its best execution processes and “established relationships read more >>>

    Source:: BusinessInsider.Com