Robinhood Markets Inc. is under investigation by the Securities & Exchange Commission for failing to disclose its practice of selling clients’ orders to high-speed trading firms, according to Bloomberg News, quoting sources. Prior reports of SEC filings supported the reports of high-frequency trading firms paying Robinhood 10 times as much as they pay to other discount brokerages.
Some brokerages like Vanguard, for example, refuse to sell their customers’ order flow. Interactive Brokers, which is the preferred broker for sophisticated retail traders, also will not sell order flow and allows customers to route orders to any exchange they choose.
Robinhood, according to reports sell customer orders and seems to be making far more than their competitors from it.
Attorney Jeffrey Newman represents whistleblowers including SEC whistleblowers reporting fraud relating to financial markets and violations of security laws. He can be reached at email@example.com or by calling 617-823-3217