reddit how much to charge on whats my price

Sarah Cabral is a teaching and research fellow in the Carroll School of Management at Boston College. Amy LaCombe is associate dean for undergraduate curriculum in the Carroll School's undergraduate program. Views are their own.

1.  Introduction

In this business ethics case study, nosotros will focus on the history making GameStop brusk and stock price surge that occurred during January 2021. On Thursday, Jan. 28^thursday, 2021 Robinhood CEO, Vlad Tenev, decided to halt the trading of GameStop stock on his visitor's stock trading app. Did Tenev make the correct choice? Did he accept a option? If non, and then what should Robinhood do to make apology for the function it played in causing budgetary amercement to its customers? In society for students to argue the appropriateness of the decision and response, nosotros will provide an overview of the due east-Trading industry Robinhood is a part of and their role within it, in addition to providing a background on the video game retailer, GameStop. Furthermore, the social media company, Reddit, which provided the platform for users to connect and rally behind GameStop and purchase shares, will likewise be explained and examined.

two.  e-Trading Software Developers Industry

The e-Trading Software Developers industry is an industry that allows institutional and retail investors to trade securities online and access and track stock performance. This is a $10.4 billion dollar industry with a 34% profit margin and 325 operators. Inside the industry, acquirement is expected to increment iii.5% over the next v years, due to increased need. The projected growth of this industry is based, in role, on the rise of exchange traded funds and alphabetize investment vehicles, which are making it easier for people to go full general investment exposure. Another growth factor is due to people's preference for online services that, in the past, used to merely be conducted offline. Additionally, trading costs and fees have decreased due to advancements in manufacture software, increased data storage, and reductions or eliminations of commissions (IBISWorld).

The largest companies in this industry are Charles Schwab Corporation with 23.7% of the market and $3.8 trillion assets under management, Fidelity National Information Services Inc. with 19.7% of the marketplace and $2.5 trillion assets under management, and TD Ameritrade, recently acquired past Schwab, with 12.five% of the market and $1.3 trillion assets nether management (IBISWorld and TopRatedFirms). The average account size for Charles Schwab, Fidelity, and TD Ameritrade are $240,000, $112,000, and $110,000, respectively. While the peak four industry players account for around 60% of the revenue, the 20 companies in the center share x% of revenue, and the lesser 300 companies share xxx% of the revenue, making the industry somewhat fragmented with a medium barrier to entry (IBISWorld). Thus, newer and smaller companies concord a small fraction of the industry marketplace share but are fast growing with constructive marketing strategies.

three.  History of Robinhood

Robinhood is an American app-based stock brokerage company that offers committee gratis stock and ETF trading (FastCompany). According to their website, "Robinhood's mission is to democratize finance for all" (Robinhood). It was founded in 2013 and the app was launched in 2015 by two former Stanford University roommates, with the hopes of "democratizing" the financial markets, which were non charging fees to the big investment banks merely were charging fees to everyday investors (thestreet.com). Robinhood has a subscription based service that allows members to utilize instant deposits to trade before the market has opened and subsequently it has airtight (FastCompany). Robinhood has $twenty billion assets under management with an average account size of $3,500 (BusinessofApps). In 2019, it had 6 million users, up from 3.seven 1000000 the previous yr (thestreet.com), which is more than the traditional online brokerage of Due east*Merchandise. Robinhood'southward user base grew to thirteen 1000000 in May 2020 and is estimated to be near 18 million today  based on an estimate past JMP Securities (NYT and Morningstar).

In 2018, Bloomberg reported that more than than 40% of Robinhood's revenue came from selling its customers' orders to high frequency trading firms or "market makers", which is a controversial practice on Wall Street (Bloomberg). A "market maker" is a visitor that offers to both buy and sell a stock at unlike prices, hoping that the difference between the bid toll offered for the amount of stock they desire to purchase will be lower than the cost at which they volition ultimately sell. Since investors need to liquidate avails for dissimilar reasons at different times, a market maker provides brokerages with the opportunity to sell bundles of stock for cash. The market maker takes on gamble by purchasing stock without the guarantee of that stock being later sold for a higher price than that at which it was bought. To compete with exchanges, such equally the New York Stock Commutation, market makers, such equally Citadel Securities, pay for society flows and offer rebates to brokerages, such equally Robinhood Securities (Morningstar). Market makers typically offer improve prices than exchanges, and Robinhood makes money off of directing trades to market makers. Market place makers execute trades for Robinhood, send Robinhood Securities a tape of the trade, and and then Robinhood works with a clearinghouse, such as National Securities Clearing Corporation (NSCC), to ensure that the stock gets to the buyer and the money gets to the seller. Market place makers provide rebates on trades and pay for order flows, which creates a misalignment of the interests of the brokerage business firm, such every bit Robinhood Securities, and its clients (public.com). They are controversial in how they handle the orders received. Since market-makers take access to the trades before they are actually placed, they technically are able to front-run the trades for their own accounts or engage in other unethical trading practices (Appendix B).

(Reddit.com)

 Another manner that Robinhood makes coin is on the interest information technology charges to "lend" its clients shares to third parties, such as hedge funds, who may desire to "brusk" the stock. Additionally, Robinhood generates revenue past charging interest to the retail investors who utilize margin accounts. When investors sign up for a Robinhood business relationship, they accept the option of opening upward a margin account, either a "Gold" or "Instant" account, where they agree to allow Robinhood to lend those shares. That margin business relationship allows hedge funds to purchase the stock "on credit" or on a loan from Robinhood. It is a line of credit with interest tied to movements in the price of the stock. When an investor believes that a stock price will go down, he/she can borrow the stock from Robinhood and "short" it. If there is a high demand to borrow that stock and short information technology, the interest on the borrowing of that stock is high. If there is not a lot of demand to infringe a stock and curt it, the interest rate is quite low as the risk is lower to the banker (medium.datadriverinvestor.com). Robinhood holds the actual stock for its investors at the National Securities Immigration Corporation (NSCC), whose parent company is the Depository Trust & Clearing Corporation (DTCC), and then lends out that stock to hedge funds and other agents with margin accounts who may want to "short" that stock (Appendix A). As more than demand for shorting that stock appears, Robinhood collects more interest on that loan of the stock and is allowed to continue all of the money earned on the loaning of those shares, as long as the agents and funds take the power to pay that interest and loan back. If the hedge funds keep to lose because the cost goes up (and they have shorted it), it threatens their ability to pay Robinhood back for the loan as well. This allows Robinhood to survive financially without collecting commissions similar traditional retailers.

4.  History of GameStop

GameStop is the world's largest video game retailer and was founded in 1984 past Harvard business school classmates.  The first shop opened in Texas, and this Fortune 500 visitor currently operates over 7200 stores in xiv countries (5starsaver.com). GameStop shares are traded on the New York Stock Exchange and the Frankfurt Stock Exchange. The company generates acquirement by selling gaming consoles and physical video games and accessories. In 2011, GameStop achieved $10 billion in revenue. Yet, just equally streaming services resulted in decreased demand for physical DVDs and CDs, video games are now available to download or stream, making physical discs more than obsolete. According to Sony, around half of the video games sold by their company in 2020 were digital. As entertainer reporter, Adam Epstein, writes, "GameStop is the Blockbuster of video games—a relic of former consumption habits, barely scraping by in a digital world" (Quartz). Reflecting the new consumer preference for digital games, GameStop'southward revenue in 2019 only reached $6.4 billion, and the company laid off hundreds of employees and had plans to close one,000 stores (Quartz).

1 year ago on March 23, 2020, GameStop's stock price closed at $4.22. On Jan 27, 2021, less than one yr later on, the stock closed at $347.51 due to an increase in demand for its stock, proving i of the largest increases in an individual stock cost in the history of the NYSE (finance.yahoo.com). The surge was due to a grouping of individual investors who decided to purchase GameStop stock, later determining that the stock was undervalued, followed by significant institutional buying. The platform that the private investors used to communicate with one another is the social media platform, Reddit.

five.  Reddit and The GameStop Short

Reddit was founded in 2005 to be "the front page of the internet" (mashable.com), where people went to go all of their data, rather than clicking through multiple sites each mean solar day. Today, Reddit is the seventh most viewed website in the The states and 18th in the world (mashable.com), providing internet users with upward to date news, analogousness groups and a place where users can create their ain communities.

One of the subcommunities in Reddit (called a subreddit) is a group called WallStreetBets, where participants discuss stock and trading options.  This group noticed that hedge funds had taken a large "brusk" position on GameStop stock (guardian.com). That means these hedge funds bet that the GameStop stock would go downwards. When investors "brusk" a stock, they sell a borrowed stock, believing that the price of that share will become down with the hope of ownership information technology back afterward at a lower toll, thus earning money on the sale and buy back of the stock. At that place is an unlimited chance since the price of the stock can rise infinitely, allowing the brusk-seller to lose an space amount of money.  The toll of that stock can increase forever, making the process of short selling incredibly risky. This is unlike from ownership a share of stock, since the toll of the stock cannot autumn lower than $0, meaning the investor cannot lose more coin than he or she already paid to purchase the share.

The subreddit group decided to make several posts beginning on Jan 22, 2021, on Reddit to purchase the GameStop shares, driving upwards the price some 600% in four days, thus forcing those large Wall Street firms who bet that the stock would go downwards, to lose billions in its portfolio (guardian.com).  As more demand for GameStop took over the market, the price went soaring to its loftier of $347.51 on January 27, 2021. Gamestop saw its market capitalization go from $iii billion to $25 billion in a week and 50 million shares of the company changed hands in the span of an hour on Monday, January 25th (nationalreview.com). The Redditors' purchases of GameStop shares alone did non account for the dramatic price increase, however. The consequences of their purchases did. What caused the toll to sky-rocket is a long-established practice on Wall Street called a "short-squeeze." Hedge funds frequently utilize this tactic against each other. Because hedge funds had leveraged themselves out to short GameStop so aggressively with the hope of squeezing out the last of its potential upside, the Redditors realized that all they needed to do was generate plenty upward pressure level on the stock cost past buying upward shares to breach a certain threshold where hedge funds began to lose pregnant amounts of money. One time that threshold was breached and hedge funds were starting to lose millions with every cent the stock rose, these hedge funds were forced to close out their short positions. Since shorting represents the sale of a borrowed share, in order to close out their positions, the hedge funds were forced to purchase the GameStop shares at their electric current marketplace price. The billions of dollars worth of buy orders by hedge funds to close out their positions and prevent further losses is what shot the toll of the stock up and then dramatically. And considering the Redditors had already bought shares to create that force per unit area on the hedge funds, the value of their shares rose exponentially.

6.  Decision point: January 28th

In the early on morning time hours of January 28, 2021, Robinhood CEO, Vlad Tenev, received a frantic call from the company's operations team. The telephone call was based on a alphabetic character the team had received at 4 a.m. from the National Securities Clearing Corporation (NSCC).  Robinhood routinely receives letters from the NSCC each morning at 4 a.thou., then receiving the letter was not the cause for alarm. Rather, it was the contents of this item letter, a request for the company to bear witness that information technology had $three billion in greenbacks, that resulted in the call to Tenev. NSCC, like other clearinghouses, ensures that the purchase and sale of stock goes through smoothly for both the buyer and seller. The book of stock traded through Robinhood spiked so much that the NSCC needed to run into more than money in Robinhood's account to make sure that the buy orders would, in fact, articulate. Because of the volatility of stocks like GameStop, NSCC adamant that Robinhood needed to have more capital in order to embrace a potential collapse in stock prices between the purchase appointment and the immigration date ii days later (Appendix A). Because the eolith requirement of the clearinghouse well-exceeded Robinhood'due south on-manus liquid majuscule, the existing trade orders would not have been able to settle unless they satisfied the deposit requirement. Tenev ultimately decided that day to halt buy orders of GameStop stock and negotiate the deposit requirement down to $700 million. Did Tenev make the correct choice? Did he take a selection? How is Robinhood going to make this right?

Bibliography

Adamczyk, Alicia. "'Y'all Will Lose Your Money Very, Very Speedily': What Investors Need to Know about GameStop's Stock Surge." CNBC. January 27, 2021. https://www.cnbc.com/2021/01/27/what-to-know-about-gamestops-stock-fasten.html.

Andrews, Chris. "The Largest Brokerage Firms By Avails Under Direction in 2021." All-time 10 Brokerage Firms. https://topratedfirms.com/brokers/ratings/meridian-rated-brokerage-firms.aspx.

Bruhn, Asger. "Robinhood Lends "Your" Shares to Short Sellers (and Keeps All the Proceeds)." Medium. January 31, 2021. https://medium.datadriveninvestor.com/robinhood-lends-your-shares-to-short-sellers-and-keeps-all-the-gain-78353ca33fb9.

Epstein, Adam. "The Video Game Manufacture Is Leaving GameStop behind." Quartz. https://qz.com/1965538/why-did-hedge-funds-curt-gamestop-in-the-first-place/.

Fiegerman, Seth. "Aliens in the Valley: The Complete and Chaotic History of Reddit." Mashable. December 03, 2014. https://mashable.com/2014/12/03/history-of-reddit/.

Foxman, Simone, Julie Verhage, and Suzanne Woolley. "Robinhood Gets Almost One-half of Its Revenue In Controversial Bargain With High Speed Traders." Bloomberg. Oct 15 2018. https://www.bloomberg.com/news/articles/2018-10-15/robinhood-gets-almost-half-its-revenue-in-controversial-deal-with-high-speed-traders.

"Frequently Asked Questions." Robinhood. https://robinhood.com/us/en/support/frequently-asked-questions/.

"GameStop: How Reddit Amateurs Took Aim at Wall Street's Short-sellers." The Guardian. January 28, 2021. https://world wide web.theguardian.com/concern/2021/jan/28/gamestop-how-reddits-amateurs-tripped-wall-streets-short-sellers.

Groom, Christie. "GameStop - The History of the Globe'due south Largest Video Game Retailer." v Star Saver. September 12, 2018. http://5starsaver.com/favorite-stores/gamestop-worlds-largest-video-game-retailer.

Moses, Jeremy. "East-Trading Software Developers." IBIS Earth. June 2020.

Pisani, Bob. "There'due south Now a Tape Number of 401(k) and IRA Millionaires, According to Fidelity." CNBC. February 13, 2020. https://www.cnbc.com/2020/02/13/fidelity-there-is-now-a-tape-number-of-401k-and-ira-millionaires.html#:~:text=Allegiance says a record 441,000,last quarter's balance of $105,200.

Popper, Nathaniel. "Robinhood Has Lured Young Traders, Sometimes With Devastating Results." The New York Times. July 08, 2020. https://www.nytimes.com/2020/07/08/technology/robinhood-risky-trading.html.

"Robinhood: Most Innovative Visitor." Fast Company. January 01, 2000. https://www.fastcompany.com/visitor/robinhood.

Sraders, Anne. "How Does Robinhood Brand Money?" TheStreet. February 10, 2019. https://www.thestreet.com/investing/how-does-robinhood-make-money-14856528.

Tenreiro, Daniel. "Why Robinhood Halted GameStop Trading." National Review. January 29, 2021. https://www.nationalreview.com/2021/01/why-robinhood-halted-gamestop-trading/.

"What Happened This Calendar week." Robinhood. Under the Hood. January 30, 2021. https://blog.robinhood.com/news/2021/i/29/what-happened-this-week.

Widman, Jake. "What Is Reddit?" Digital Trends. March 29, 2021. https://world wide web.digitaltrends.com/web/what-is-reddit/.

Appendix A: How NSCC Works

It takes settlement time on trades (up to 2 days), and so that is why the NSCC requires brokerages to increase their collateral when there is high volatility in trading. It allows the NSCC to make sure that the brokerage firms have the assets to support the potential losses on the trades.

For the sake of simplification, permit's walk through a hypothetical. If I were to sign up to some brokerage app similar Robinhood, I could buy and sell securities available on the public market. These include stocks like GME or commutation-traded funds (ETFs). Some brokers as well now allow customers to purchase cryptocurrencies, though there may exist restrictions in trading or transferring these to off-platform wallets. Here's what this hypothetical process might look similar (coindesk.com):

1) I would buy a share of a stock, let'south call it $STOCK, on this app.

2) The order would become to the app's internal order management organisation (OMS).

iii) The OMS would route the order to an exchange or to another banker-dealer.

4) Afterwards the social club is matched, the substitution would tell the app.

5) All of the exchange'due south orders would get to the continuous net settlement process, which aggregates all of a company's trades into 1 long and one short position on the NSCC and this can take up to two days.

Appendix B: SEC Printing Release

SEC Charges Robinhood Financial With Misleading Customers About Acquirement Sources and Failing to Satisfy Duty of Best Execution

FOR IMMEDIATE RELEASE

2020-321

Washington D.C., Dec. 17, 2020 —

The Securities and Exchange Committee today charged Robinhood Financial LLC for repeated misstatements that failed to disclose the house's receipt of payments from trading firms for routing client orders to them, and with failing to satisfy its duty to seek the best reasonably available terms to execute customer orders.  Robinhood agreed to pay $65 million to settle the charges.

According to the SEC's guild, betwixt 2015 and tardily 2018, Robinhood made misleading statements and omissions in customer communications, including in FAQ pages on its website, about its largest acquirement source when describing how it fabricated money – namely, payments from trading firms in exchange for Robinhood sending its customer orders to those firms for execution, likewise known as "payment for club flow."  Equally the SEC'due south society finds, one of Robinhood's selling points to customers was that trading was "committee free," simply due in large part to its unusually loftier payment for order flow rates, Robinhood customers' orders were executed at prices that were junior to other brokers' prices.  Despite this, according to the SEC'south order, Robinhood falsely claimed in a website FAQ between October 2018 and June 2019 that its execution quality matched or beat that of its competitors.  The order finds that Robinhood provided inferior trade prices that in aggregate deprived customers of $34.ane one thousand thousand even after taking into account the savings from not paying a commission.  Robinhood made these fake and misleading statements during the fourth dimension in which it was growing rapidly.

"Robinhood provided misleading data to customers well-nigh the true costs of choosing to trade with the firm," said Stephanie Avakian, Director of the SEC's Enforcement Segmentation.  "Brokerage firms cannot mislead customers near guild execution quality."

"Robinhood failed to seek to obtain the best reasonably available terms when executing customers' orders, causing customers to lose tens of millions of dollars," said Joseph Sansone, Chief of the SEC Enforcement Sectionalisation'south Market Corruption Unit of measurement.  "Today'southward action sends a clear bulletin that the Commission will non allow brokers to ignore their obligations to customers."

"In that location are many new companies seeking to harness the power of technology to provide alternative ways for people to invest their money," added Erin Due east. Schneider, Director of the SEC's San Francisco Regional Office.  "But innovation does not negate responsibility under the federal securities laws."

Without albeit or denying the SEC's findings, Robinhood agreed to a cease-and-desist order prohibiting it from violating the antifraud provisions of the Securities Act of 1933 and the recordkeeping provisions of the Securities Commutation Human activity of 1934, censuring information technology, and requiring information technology to pay a $65 million civil penalty.  Robinhood also agreed to retain an independent consultant to review its policies and procedures relating to client communications, payment for order flow, and best execution of customer orders, and to ensure that Robinhood is effectively following those policies and procedures.

The SEC's investigation was conducted by Jonathan Warner and Ainsley Kerr of the Market place Abuse Unit and Matthew Meyerhofer, Victor Hong, and Andrew Hefty of the San Francisco Regional Role.  The instance was supervised by Steven Buchholz and Mr. Sansone of the Market Abuse Unit and Monique C. Winkler of the San Francisco Regional Office.  Examinations of Robinhood conducted by Michael Marren, Catherine Cotey, Michael Wells, David Kinsella, and John Broderson of the SEC'southward Chicago Regional Part and Jerry Schoenborn, Shanti Radkar, Marcus Chan, and Stephanie Wilson of the SEC's San Francisco Regional Office contributed to the investigation.  The SEC also acknowledges the help of the Fiscal Industry Regulatory Authorization.

Instructor'due south Note

Learning Outcomes:

This case hopes to highlight the power of social media in influencing actions with the buy and sale of stock. It is largely a new field every bit E-trading software is gaining popularity. This is allowing individual investors to participate in trading in a way that was usually reserved for the big investment banks. Social media is influencing the actions of these individual investors, creating a lot of volatility and incertitude in the markets, with respect to certain stocks.

This case also hopes to evidence that in that location are investors who are betting confronting companies, and this "shorting" of a stock allows there to exist another market place where investors are betting on the direction of the stock price. This can exist risky if a person "shorts" a stock considering the stock can go up forever, causing excessive losses. The fact that there are investors betting on both possible directions of the stock (curt and up), allows there to be liquidity in the marketplace and strengthens the market if there is a stock cost that is overinflated.

This case hopes to highlight how conflicts of interest may put companies in a position where they have to act in a manner that goes against their stated culture.  Robinhood was founded to "democratize" the stock market, but when it halted trading, it went confronting its stated purpose and did non permit its private investors to purchase shares of Gamestop stock.  It is complex and nuanced, but nosotros hope that students can see that short-term financial survival tin influence people to make a conclusion that volition potentially compromise their mission or purpose. It is important to have these discussions early on as evidence shows that "scripting" or anticipating difficult situations tin be a powerful tool to gainsay this tension and go along companies from compromising their values.

Finally, this example hopes to spark a form discussion about whether a company should try to brand apology for decisions made that may go against the all-time interest of its customers.  If and then, what are some possible suggestions to make those amends? There are several stakeholders involved with business organization decisions and what responsibility does a company take to its customers when their own fiscal survival is at risk?  How can they repair that relationship? Is that fifty-fifty possible?  These are some questions we hope that the case volition raise in class discussions.

Awarding: This case is most appropriate for courses in business ethics, corporate social responsibleness, and introduction to management.

Fundamental Words: Ethics, corporate social responsibleness, company values

Suggested Uses: This case would exist valuable for concern ethics classes to bear witness how fiscal survival and/or short-term thinking can arrive the way of values and mission.  It could also be used in a finance ethics grade, to show how the market and individuals tin be influenced by outside forces and larger and more than powerful players in the market, which could lead to a discussion whether that should exist then.

Terminology (Investopedia.com):

1. Clearinghouse - A clearinghouse is a designated intermediary betwixt a buyer and seller in a financial market. The clearinghouse validates and finalizes the transaction, ensuring that both the buyer and the seller laurels their contractual obligations.Every financial marketplace has a designated clearinghouse or an internal clearing partition to handle this function.
2. Disharmonize of interest - A conflict of interest occurs when an entity or private becomes unreliable because of a clash between personal (or self-serving) interests and professional duties or responsibilities.
3. eastward-Trading - Electronic trading involves setting up an business relationship with a brokerage of your choice, including providing your contact and financial information—to facilitate electronic transfers between your banking concern and the brokerage.
4. Hedge funds - A hedge fund is merely a fancy proper noun for an investment partnership that has freer rein to invest aggressively and in a wider variety of financial products than well-nigh common funds. It'southward the marriage of a professional fund director, who is often known as the full general partner, and the investors, sometimes known as the express partners. Together, they pool their money into the fund.
5. Institutional traders - Institutional traders buy and sell securities for accounts they manage for a grouping or institution. Alimony funds, common fund families, insurance companies, and substitution traded funds (ETFs) are mutual institutional traders.
6. Interest - Interest is the price of borrowing money, where the borrower pays a fee to the lender for the loan.
7. Market maker - A market maker (MM) is a house or individual who actively quotes two-sided markets in a security, providing bids and offers (known as asks) along with the market size of each.
8. Payment For Order Period (PFOF) - Payment for social club period (PFOF) is the compensation and benefit a brokerage firm receives for directing orders to dissimilar parties for trade execution. The brokerage firm receives a small payment, usually fractions of a penny per share, as bounty for directing the guild to a item market maker.
9. Retail traders - Retail traders, frequently referred to as individual traders, buy or sell securities for personal accounts
10. Brusk - A short, or a brusque position, is created when a trader sells a security beginning with the intention of repurchasing it or covering it later at a lower price. A trader may decide to short a security when she believes that the toll of that security is likely to subtract in the most time to come. A covered brusque is when a trader borrows the shares from a stock loan department; in return, the trader pays a borrow-rate during the time the short position is in place.
11. Curt squeeze - A short squeeze occurs when a stock or other asset jumps sharply higher, forcing traders who had bet that its price would fall, to buy it in order to foreclose even greater losses. Their scramble to buy only adds to the upward pressure on the stock's price. Short-sellers infringe shares of an asset that they believe will drop in price in guild to buy them afterward they autumn. If they're right, they return the shares and pocket the difference between the price when they initiated the brusk and the actual sale price. If they're wrong, they're forced to purchase at a higher price and pay the divergence betwixt the toll they set up and its auction price. Short sales take an expiration appointment, then when a stock unexpectedly rises in price, the curt-sellers may accept to act fast to limit their losses.

Discussion Questions:

1. What options did Tenev have when he received the letter from the clearinghouse on January 28th 2021?
2. Did Tenev make the right choice to halt the trading of GameStop stock? Who lost and who benefited?
3. Did Robinhood break a promise to permit users to trade as they see fit? If yes, why? If no, why?
4. Massachusetts Secretary of the Commonwealth William Galvin, the land'south top securities regulator, accuses Robinhood of declining to protect consumers, stating, "Treating this similar a game and luring young and inexperienced customers to make more and more trades is not simply unethical, only also falls far brusque of the standards nosotros require in Massachusetts." Do you agree? Why or why not?
5. What should Robinhood do in response to the consumer consequences of the January 28th 2021 decision?

Bibliography

Keshner, Andrew. "Lawsuits against Robinhood in the GameStop Saga Are Getting Their Twenty-four hours in Court - but There'south One Large Snag." MarketWatch. April nineteen, 2021. https://www.marketwatch.com/story/lawsuits-against-robinhood-in-the-gamestop-saga-are-getting-their-day-in-court-but-theres-ane-big-snag-11618806321.

Leonhardt, Megan. "AOC Wants Robinhood to Give Customers the Profits from Payment for Social club Period. Here'southward What She's Talking well-nigh." CNBC. February nineteen, 2021. https://world wide web.cnbc.com/2021/02/xix/aoc-wants-robinhood-to-return-payment-for-order-menstruation-profits.html.

"Massachusetts Regulator Accuses Robinhood of failing to Protect Investors." Reuters. December 16, 2020. https://www.reuters.com/business/massachusetts-regulator-accuses-robinhood-failing-protect-investors-2020-12-16/.

Squad, Robinhood. "Statement on Massachusetts Securities Partitioning Complaint." Under the Hood. April 16, 2021. https://blog.robinhood.com/news/2021/4/15/statement-on-massachusetts-securities-division-complaint.

Wilhelm, Alex. "Robinhood Raises $1B later Trading Halts to Go along Its Platform Running." TechCrunch. January 29, 2021. https://techcrunch.com/2021/01/29/robinhood-raises-1b-after-trading-halts-to-keep-its-platform-running/.

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Source: https://www.scu.edu/ethics/focus-areas/business-ethics/resources/robinhood-reddit-and-gamestop-what-happened-and-what-should-happen-next/

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