The Sheriff Wants a Word With Robinhood
Bloomberg Businessweek|March 08, 2021
Massachusetts regulator William Galvin says the free app is encouraging novice investors to trade themselves into trouble
Pat Regnier

William Galvin is as old school as they come, even for a state securities regulator. Galvin, 70, drives an Impala, uses a flip phone, and leaves the emailing and tweeting to his staff. But he may turn out to be the worst nightmare of Robinhood Markets, the company whose zero-commission brokerage app captivates millennial and Gen Z investors.

Galvin is the secretary of the Commonwealth of Massachusetts, a position he’s held since 1995, when the founders of Robinhood were still in grade school. In that time, Galvin turned the office that oversees elections, historic preservation, and record-keeping into a financial regulator that’s sometimes ahead of its national counterparts. He’s won penalties from such Wall Street giants as Morgan Stanley and Goldman Sachs, as well as local icons like the mutual fund manager Putnam Investments.

In December his office sued Robinhood, alleging that the trading platform violated state law by emphasizing the addictive thrills of trading over helping novice investors learn how to make sound investment decisions. He says the company’s brightly designed smartphone app is promoting the “gamification” of investing with features such as animated confetti when users make their first transaction and promotions giving away free stock for signing up or referring friends.

Although the company doesn’t charge commissions, it makes money from trading activity because outside firms such as Citadel Securities pay to be able to fill Robinhood customers’ orders. (Those firms can earn profits on tiny differences in market prices.) Robinhood co-founders Vlad Tenev and Baiju Bhatt could become billionaires after an initial public offering, which could take place within weeks, Bloomberg has reported.

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM BLOOMBERG BUSINESSWEEKView All

The Food Fight in Fake Meat

Beyond Meat was an early leader. But rival Impossible Foods and others want to eat its lunch

6 mins read
Bloomberg Businessweek
April 19, 2021

The U.K. Wants to Clean Up Space

The amount of debris in orbit is an increasing danger—and a potential market opportunity

4 mins read
Bloomberg Businessweek
April 19, 2021

Peak Pallet

Prices for a warehouse staple are at a record, buoyed by the boom in e-commerce

4 mins read
Bloomberg Businessweek
April 19, 2021

THE MAN WHO KEEPS THE FAR RIGHT ONLINE

While Amazon and its peers have stopped supporting certain prominent White supremacists and conspiracy theorists, Nick Lim has stepped in

10+ mins read
Bloomberg Businessweek
April 19, 2021

Stopping the Race to the Bottom on Taxes

The U.S. is energizing a global effort to put a floor under corporate tax rates

8 mins read
Bloomberg Businessweek
April 19, 2021

The Guggenheims Of NFTs

Perhaps you’ve heard of nonfungible tokens? These collectors already have millions of dollars’ worth

10 mins read
Bloomberg Businessweek
April 19, 2021

Reincarnation And Realpolitik

China, India, and the U.S. are vying to influence the selection of the next Dalai Lama

5 mins read
Bloomberg Businessweek
April 19, 2021

WAITING FOR ELON

It’s not easy to compete with Miami and Austin for high-tech jobs. But Adelanto, Calif., which boasts a light regulatory environment, an enthusiastic city manager, and plenty of dirt, is giving it a shot

10+ mins read
Bloomberg Businessweek
April 19, 2021

LAW & CRYPTO

Arthur Hayes faces U.S. prosecution over how he ran his overseas Bitcoin exchange

5 mins read
Bloomberg Businessweek
April 19, 2021

In Hot Pursuit

Chris Urmson’s company, Aurora, has merged with Uber’s self-driving unit to take on Waymo

7 mins read
Bloomberg Businessweek
April 19, 2021
RELATED STORIES

STOCK TRADING APP COMPANY ROBINHOOD FILES PLAN TO GO PUBLIC

Stock trading app company Robinhood said this week that it has submitted a confidential plan to go public later this year.

1 min read
AppleMagazine
AppleMagazine #491

HOOD: OUTLAWS & LEGENDS

The creators of Eve Valkyrie blend folklore with heist movie

4 mins read
Edge
December 2020

Arrowing experience to fill lockdown hours

While some took up breadmaking and learning new languages during the COVID-19 lockdown, Soldier Palmer turned to archery

6 mins read
Shooting Times & Country
August 19, 2020

PERSONALISED FACE MASKS - The New Fashion Statement

Masks are becoming more funkier and trendier by the day, as people have started to look at it not only as an essential but also as a fashion statement, writes Chandni Kumar, Digital Influencer, Creative Consultant & Founder of The Talk Studio.

2 mins read
Shoes and Accessories
July 2020

The iPhone 11 Pro and the iPhone 11 Pro Max

The most powerful iPhone ever (just like the last one)...

4 mins read
Essential Apple User Magazine
May 2020

Time for something new?

Bored of the same old equestrian activities? Debbie Graham takes a look at eight lesser-known equestrian sports that could just become addictive

5 mins read
Cotswold Life
April 2020

FOOD FOR THOUGHT

Team Robin Hood Army aims to make the world hunger free. Co-founder, Aarushi Batra, shares her vision and the organisation’s mission with Nikshubha Garg

4 mins read
Femina
March 24, 2020

TO NEW ENDEAVOURS

As the new year comes in, we all set ourselves some new targets for ourselves. New body for us, new diet for us, renewed relationships for us – everything for us. This new year, how about giving a thought to someone else.

3 mins read
Glimpse
January 2020

Leading the Way

A bracing walk along Yorkshire’s east coast and the Cleveland Way is the ideal tonic WORDS: Andy Chaplin

3 mins read
Yorkshire Life
February 2020

Oppo Reno2

As a prelude to the launch of the Reno2, Oppo took members of the press on an adventure with the phone to be able to put it through its paces and have a good idea how it performed prior to our actual reviews.

2 mins read
Gadgets
November 2019