A History of Daytrading: Regulators, Congress and Robinhood

Written by Gontran de Quillacq

Gontran de Quillacq is an expert witness and a legal consultant. He is a recognized authority in options, trading, derivatives, structured products, portfolio management, hedge funds, mathematical finance, quantitative investment, strategy research and financial markets in general.

The Scorpion and the Frog

More about Robinhood and its history of regulatory problems… Massachusetts’ Enforcement Division filed a complaint about

  • the firm’s aggressive growth tactics,
  • its repeated outages and disruptions, which were well known and ignored while pushing growth,
  • its gamification strategy,
  • and insufficient supervision for option trading.

Here is an excellent, albeit a bit engthy, analysis of the history, regulatory and general situation of Robinhood & its Day Trading business by Bill Singer of Broke and Brokers. It notably reminds us that

  • Massachusetts makes quite an income from its lottery,
  • FINRA had slapped Robinhood’s hand with a modest $1.25m a year ago,
  • Wall Street’s problem with retail executin problem started in the 90’s,
  • Robinhood has already met the frustration of its traders, sometimes suicide,
  • Complaints of the firm way outpasses all its competitors,
  • Congress was already looking into similar matters in early 2000’s,
  • Brokerage firms have a suspicious tendency of being unable to record customer complaint calls during crashes and outages…

Previous blog entries on the topic of Robinhood:

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