SEC may pursue more cases of online brokerage firms (MarketWatch)

The recent SEC case against trading app Robinhood focused on the company’s misleading statements on how it was making money through the practice known as payment for order flow. FrontLine’s Founder and President Amy Lynch comments that Robinhood’s violations occurred within a unique business model that relied on much higher margins on the payment for orders. With competitors following suit, Ms. Lynch expects the SEC to extend its purview into whether other no commission online brokers use of the practice in a similar fashion causes harm to their investors. See MarketWatch, “Congressional Democrats call for stricter oversight of free online trading after Robinhood settlement“