Robin Hood is alive and well. He has left the dark forest of Sherwood for the spotlights of social media and financial markets.
This short article introduces the actors of the play and shares the most recent acts/scenes.
Is the main theme of the play still relevant today?
Jordan A. Thomas, the former whistleblower program manager at the SEC, as well as a leading plaintiff attorney, is suing the SEC for changes to the program.
This article explains what the SEC whistleblowing program is, why it is so successful, and why you should consider it if you see fraud or crime.
The Corporate Transparency Act, enacted in the Defense Appropriation bill of January 2021, is a game-changer for financial investigators. It prevents bad actors from hiding behind anonymous shell companies – right here in the United States.
This short video explains what an expert witness is, and why Navesink International has a unique position in the securities litigation industry.
This second and last short video explains the role of the expert witness, practically speaking.
The fight against one of the largest frauds in banking history (Eur 55 bn and counting) is progressing, with the indictment of Sanjay Shah by SKAT, the Danish Tax Agency.
Our article explains the Cum/Ex fraud, as well as ‘dividend arbitrage’ activities in general.
Corruption has a new enforcement agency. The CFTC announced in March 2019 that it would start enforcing the FCPA, and it effectively delivered with a $95m enforcement against Vitol, the Swiss energy firm, for bribes paid in Brazil, Ecuador and Mexico.
“The misuse of nonpublic information provided the CFTC with a hook in the Vitol case. In the CFTC’s order, the firm was accused of bribing officials at Brazil’s national oil company, Petróleo Brasileiro SA (https://lnkd.in/gU9BjjP), to get inside information that included weekly reports on production volume and anticipated imports.”
Basically, Vitol bribed Petrobras for confidential information in the company’s business auction. It then used this ‘golden number’ to manipulate the fuel-oil benchmarks from S&P to make the competitors’ bids less valuable.
As usual, Vitol “neither admitted to nor denied the CFTC’s market manipulation findings in its settlement”…
More about Robinhood… Massachusetts’ Enforcement Division filed a complaint about
– its aggressive growth tactics,
– the firm’s outages and disruptions, which were well known and ignored while pushing growth,
– its gamification,
– and insufficient supervision for option trading.
Here is an excellent, albeit a bit lengthy, analysis of the history, regulatory and general situation of Robinhood & its Day Trading business by Bill Singer of Broke and Brokers (http://www.rrbdlaw.com/).
Robinhood has just been fined $65m for overcharging its customers, despite trades being free of charge – the company sells its order flow, and the net result is that traders are overcharged $35m/y.
The firm also mislead its clients in its advertising.
But in the back of these already serious issues, is the question of ”gamification’ of trading, where inexperienced individuals actively day-trade on margin. They end-up facing professional investors, who are much better informed and equipped than them. A previous note (https://lnkd.in/gCjKwtM) showed that most if not all end-up losing money.
This five-year-old article below still remains a good analysis of what ‘gamification’ entails. It is probably fine for school teaching and corporate training, but feeding a “high-octane gambling need” is probably not ideal for financial markets.
Robinhood’s documented bubbles, coupled with many new accounts and likely overpriced markets, could turn pretty ugly pretty fast.
Oh, so faking up an initial spread to start a market isn’t allowed? Let me put this one out, it’s not rare… CFTC fines TFS-ICAP and its managers $7m for fake FX option markets.
Interestingly enough, the action comes from a whistleblower (who will be entitled 10-30% of that recovery…)
Click here to follow Gontran de Quillacq
If already following, go to LinkedIn profile
