The Banksters

0x3…6f4

ERC721

FINRA found that for more than a year, Robinhood—which offers its customers the ability to trade in equity securities without being charged commissions—routed its customers’ non-directed equity orders to four broker-dealers, all of which paid Robinhood for that order flow. This arrangement is known in the brokerage industry as payment for order flow. FINRA Rule 5310—Best Execution—requires firms to use reasonable diligence to ascertain the best market for the subject security and buy or sell in such market so that the resultant price to the customer is as favorable as possible under prevailing market conditions. FINRA member firms that route customer orders away for execution can satisfy their best execution obligations by conducting either an order-by-order review of execution quality or a “regular and rigorous review.” FINRA Rule 5310 enumerates a number of criteria for firms to evaluate in these reviews. During its reviews, Robinhood did not reasonably consider the Rule 5310 execution quality factors (such as price improvement) that the firm could obtain from alternative markets. Instead, Robinhood’s Best Execution Committee materials focused only on the execution quality of its pre-existing routing destinations, all of which paid Robinhood for that order flow. In addition, the firm did not perform systematic best execution reviews of several order types, such as nonmarketable limit orders, stop orders, and orders received outside of regular trading hours. Accordingly, hundreds of thousands of orders each month fell outside the firm’s “regular and rigorous” review process. In addition, Robinhood’s supervisory system was not reasonably designed to achieve compliance with its best execution obligations. The firm’s supervisory system disregarded several order types and factors to be considered in conducting its best execution reviews. Further, the firm’s written supervisory procedures concerning best execution and its “regular and rigorous” reviews merely recited the regulatory requirements. They provided no description of the firm’s supervisory system or guidance as to how it should supervise to achieve compliance with those requirements. “Best execution of customer orders is a key investor protection requirement,” said Jessica Hopper, Senior Vice President and Acting Head of FINRA’s Department of Enforcement. “FINRA member firms must exercise reasonable diligence in performing regular and rigorous reviews to achieve best execution for their customers.”. For more info visit https://www.finra.org/media-center/newsreleases/2019/finra-fines-robinhood-financial-llc-125-million-best-execution

Name

4

Owner

0x93a0722d2AB5A982CC1f17CBb57AF3021304a163

ID#4

Rarity

MID:38%