And the firms pay companies like Robinhood to send their customers’ orders to them for execution.

Critics say its users pay in another, more hidden way, because Robinhood provides the data on stocks they’re buying and selling to big Wall Street firms. With its mission “to democratize finance for all,” Robinhood offers commission-free trading. The Silicon Valley company is said to be looking to go public this year the GameStop debacle has brought unwanted attention. Claiming 13 million users, the mobile app’s popularity has grown, fueled by a simplified trading format and first-stock-for-free inducement appealing to millennials. Tenev, an early-thirties entrepreneur who started Robinhood in 2013 with a fellow Stanford University math student. “I had no information about GameStop except what was public.'Įxpected to testify remotely at Thursday's hearing are: “I did not solicit anyone to buy or sell the stock for my own profit,' Gill says. The online GameStop booster, Keith Gill, who goes by Roaring Kitty, plans to tell the lawmakers that he reaped a profit on his investment because he did his homework on the company, and not because he touted the stock to “unwitting investors,” according to his prepared remarks. Tenev reiterated Robinhood's position that it imposed the trading restrictions solely to meet capital requirements set by regulators.Īs they question Tenev and other witnesses, lawmakers and regulators will look for answers about what the GameStop trading frenzy says about the fault lines and potential conflicts in the structure of the market that can hurt unsophisticated investors. “Any allegation that Robinhood acted to help hedge funds or other special interests to the detriment of our customers is absolutely false and market-distorting rhetoric,' Tenev says in written testimony prepared for the hearing. The accusation is that Robinhood changed the rules of the road midway through to favor big clients that stood to lose money if GameStop shares kept rising. The restrictions lasted in some form for days.

28 from buying shares of GameStop and a dozen other companies. The CEO, Vlad Tenev, is denying speculation from some lawmakers that Robinhood acted to favor its big Wall Street clients when it blocked customers on Jan. The players include a swaggering 34-year-old YouTube personality and GameStop evangelist one of the richest and most prominent investment tycoons and the CEO of the online platform Robinhood that hosted a tsunami of speculative GameStop trading but faced intense criticism for restricting trading at the height of the frenzy.

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