Robinhood Markets, Inc.: Concerns Over Payment for Order Flow

Robinhood Markets, Inc.: Concerns Over Payment for Order Flow

Ethier, T., Barraza, D., Cipriano, M., O’Rourke, J. S. (editor)
June 27, 2022
North America
Accounting & Finance
12 pages
online trading, PFOF, cryptocurrency, crypto-governance, investing
Student Price: 
$4.00 (€3.67)
Average rating: 

Robinhood, an online trading platform, has revolutionized the trading industry by the incorporation of payment for order flow (PFOF). The platform has drawn many amateur investors to start investing, especially in cryptocurrencies. Controversies have arisen with the widespread use of the PFOF business model that have called for regulators to step in and
possibly make changes.

Learning Outcomes: 

1. To highlight the conflict that arises as a company tries to balance its socially responsible principles while maintaining growth and profitability.
2. To provide an example of how a company’s decision to focus on a youthful market might lead to repercussions impacting reputation.
3. To encourage analysis and evaluation of corporate strategy founded on bringing an inexperienced customer base into a complex business industry.
4. To demonstrate the importance of corporate actions and the standard they establish for media and public perception.
5. To encourage the discussion regarding the level of responsibility broker firms have to the rights and security of their users’ monetary funds.