Robinhood Users Come Under Attack — WSJ, Vlad Tenev (Document 585-10)
Summary
Exhibit 43, entered on the FLSD docket on 06/30/2023 as Document 585-10 in Case 1:21-md-02989-CMA, is a copy of a WSJ opinion commentary by Vlad Tenev, CEO and a co-founder of Robinhood Markets, titled ‘Robinhood Users Come Under Attack’ and dated Sept. 27, 2021. Tenev writes that critics attacking commission-free, no-minimum brokerages are “potentially limiting access to capital markets,” and cites one estimate that dropping commissions put about $13 billion back in the hands of retail investors. He rejects the charge that the platform is ‘gamified’ and defends payment for order flow, which he says lets Robinhood offer commission-free investing without minimums. He writes that a ban on payment for order flow would likely re-erect barriers that kept so many out of the market.
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- Date
- 2023-06-30
Cite this document
“Robinhood Users Come Under Attack — WSJ, Vlad Tenev (Document 585-10).”
Original at archive.org, dated 2023-06-30. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2023-06-30-covid-era-misc/
, SHA-256 9c8641d07ec8c716513502eabcda422c0e94da8f174a92dbf769937613b5c330.Full text
Case 1:21-md-02989-CMA Document 585-10 Entered on FLSD Docket 06/30/2023 Page 1 of 3
EXHIBIT
43
Case
6/19/23, 1:21-md-02989-CMA
10:59 AM Document 585-10 Entered
Robinhood on Under
Users Come FLSD Docket
Attack - WSJ 06/30/2023 Page 2 of 3
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https://www.wsj.com/articles/robinhood-users-regulation-retail-investing-order-flow-access-to-capital-investing-11632776071
OPINION COMMENTARY Follow
Robinhood Users Come Under Attack
Some critics say the app is ‘gamified,’ but building wealth should be fun,
not complex and difficult.
By Vlad Tenev
Sept. 27, 2021 6:25 pm ET
PHOTO: ANDREW KELLY/REUTERS
Amid the turmoil caused by the global pandemic, people who had been left
behind by Wall Street started investing and creating wealth like never before.
But now market gadflies, academics, and out-of-touch investors are attacking
commission-free, no-minimum brokerages, potentially limiting access to capital
markets.
The democratization of investing is no accident. Following Robinhood’s lead,
many brokerages across the industry dropped commissions in late 2019 after
charging them for decades. By one estimate, this put about $13 billion back in the
hands of retail investors. We’ve helped a generation of digitally savvy customers
engage with and understand investing.
Our business has come under attack by critics who insist that our platform is
“gamified.” They point to features such as lists of stocks and exchange-traded
funds that help people discover investments and notifications about stock
movements that help them stay informed. We designed these features, many of
which are common in our industry, to make it easier and more delightful for
users to stay informed. Investing isn’t a game, but must it be grim and difficult to
understand?
Meanwhile, some critics decry not only modern investing platforms, but also the
people who use them, suggesting that new investors are uninformed gamblers
https://www.wsj.com/articles/robinhood-users-regulation-retail-investing-order-flow-access-to-capital-investing-11632776071 1/2
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Users Come FLSD Docket
Attack - WSJ 06/30/2023 Page 3 of 3
looking to get rich quick. Not only are these stereotypes offensive, but the data
tell a far different story. According to the Finra Foundation, many new investors
in 2020 began saving for retirement with a small amount of money. Robinhood’s
own surveys indicate that our customers—about half of whom tell us at sign-up
that they are new to investing—are more racially diverse than those at
traditional brokerages.
Payment for order flow also is in the regulatory crosshairs. Robinhood accepts
payments from market makers that execute our customers’ trades at better
prices than are generally available on exchanges. Brokerage firms have used this
practice for decades. Before Robinhood, most firms received payment for order
flow and charged upfront commissions. The money brokerages like Robinhood
get from these market makers lets us offer commission-free investing without
minimums, which has helped a new generation of retail investors get started. A
ban on payment for order flow is unlikely to help retail investors get better
prices and would likely re-erect barriers that kept so many out of the market.
The democratization of markets threatens the existing order. New investors are
trying to build stable financial futures and reverse the inequities that plague our
society. One wonders whether the push to ban payment for order flow and
overregulate modern design is about investor protection or really about control.
Whatever the motivation, making it more difficult to invest would hurt those
who were shut out of the financial system for decades. Many Americans face
suffocating debt and financial challenges, and more regulation would make it
harder to build wealth. Rather than regulating financial innovators out of
existence, it is in our collective interest to embrace technology, business models
and policies that make it possible to build a more diverse generation of investors
—one that looks like America.
Mr. Tenev is CEO and a co-founder of Robinhood Markets.
Appeared in the September 28, 2021, print edition as 'Robinhood Users Come Under Attack'.
https://www.wsj.com/articles/robinhood-users-regulation-retail-investing-order-flow-access-to-capital-investing-11632776071 2/2
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