$20,000 “sweepstakes” style promotion to draw eyes of regulators (Law360)

A push by Robinhood to attract college students to its platform by offering cash giveaways is likely to create greater scrutiny by regulators. The SEC is already looking into the regulatory implications of the “gamification” impact with online trading platforms. Now with Robinhood’s new marketing strategy targeting traditionally less sophisticated and lower income college students, it adds another area of concern for regulators. Amy Lynch, FrontLine’s Founder and President, sees the company’s latest marketing as potentially misleading by using two statements that contradict on whether an account actually needs to be opened to qualify for the $20,000 tuition award. Ms. Lynch adds that while the statements as written and the overall marketing initiative may provide greater fuel for regulatory action, expect Robinhood to continue down the path of being market disruptors resolved to weather regulatory actions that come its way. See Law360 (subscription required), “Robinhood’s College Tour May Fly In The Face Of Regulators“