I confess I don't really understand the controversy here. I thought everyone who cared was already aware of how RH makes its money, and everyone who didn't was still getting a better deal per trade than they would have with traditional brokers. I ended up switching away from RH once my trades for big enough that other brokers were effectively taking less, but I'm still really grateful that I was able to learn the ins and outs of standard speculation with a $500 account
* Basically all of the brokerages make money this way.
* Robinhood took a bigger slice of the pie than the other brokerages did.
* Robinhood claimed in marketing materials that they were not taking more of the pie.
* Even factoring in the fee savings, Robinhood took so much of the pie that you'd get a better deal at other brokerages.
The issue on HN is always going to be a litigation about PFOF itself. But that's not the SEC's complaint here; rather, it's that when you enter into a PFOF rebate deal, you dial in profits for yourself against savings for customers. Everybody does that, but Robinhood both (1) turned the dial way towards themselves and (2) claimed otherwise.
The dollar amount that any Robinhood customer lost pales in comparison to the money they can lose when buying stocks in general ie gambling no way around it.
The entire industry as some may know is built on 'do your homework' and 'hold long term' is basically a big shared delusion gamble.
The majority of people will make money if the market goes up and lose money if the market goes down.
