P.P.I for the snowflake investors?17 Dec 2020 14:49
It was "caveat emptor" when I started investing..
"The Massachusetts securities regulator has launched legal action against the online trading app Robinhood, accusing it of “gamifying” investing and alleging the company did not put in place proper controls to safeguard inexperienced investors.
In its complaint filed on Wednesday, the Massachusetts Securities Division said Robinhood had violated state laws and regulations by aggressively marketing itself to investors in the state “without regard for the best interests of its customers”.
The enforcement office found that large portions of the Massachusetts public that Robinhood had approved to trade options had little or no investment knowledge, and that it had given the green light to some new traders even in violation of the company’s own policies.
The regulator also alleged that Robinhood had failed to maintain the infrastructure supporting its swelling customer base, with as many as 70 disruptions or outages between January and November.
Those trading disruptions have prompted a wave of complaints from consumers who were sidelined from financial markets at times of extreme volatility, including at points during the March sell-off.
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Robinhood statement
“As a broker-dealer, Robinhood has a duty to protect its customers and their money,” said William Galvin, the Massachusetts secretary of the commonwealth. “Treating this like a game and luring young and inexperienced customers to make more and more trades is not only unethical, but also falls far short of the standards we require in Massachusetts.”
Mr Galvin’s office also said that Robinhood had provided lists of securities that were the most popular among its customers in an effort to encourage trading on its app and site. The company generates sales by funnelling trading on its platform to market makers that match trades with other parties."
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