the man you see is a stock broker we've
come a long way from the classic image
of stock trading
there are still men in loud jackets here
on wall street
now though you don't have to be a trader
to trade stocks you can do it right on
your phone
through apps like robinhood robinhood
lets
everyday people buy and sell shares
without charging any fees
but it comes with a catch it's called
payment for order flow
and it's illegal in most markets in the
world including the united kingdom
now american politicians want to hear
from this man
robin hood's chief executive vlad tenev
about why his company
relies on this controversial practice so
let's take a look at how it works
investors place orders through robin
hood robin hood sells those orders to
investment firms
those firms execute the orders on behalf
of robin hood's investors
remember the gamestop saga small
investors rushing to buy shares in a
struggling video game retailer
all to inflate the price and give a
black eye to some major wall street
players betting against game stock
one of the biggest middlemen executing
orders to buy game stock shares
for robin hood's customers was citadel
securities
so why you might ask yourself would
citadel buy orders
what is it they say about knowledge is
power investment firms get market data
they give robinhood cash and robin hood
is able to give
individual investors free trades
the debate over payment for order flow
buffs back into the spotlight when robin
hood
briefly restricted its customers from
buying more gamestop shares
angering many of its users how is that a
free market with in any way
that's not a free market that sounds
like communism these are dirty dirty
people they deserve jail time
it also led to accusations that robin
hood put the interests of citadel
ahead of its own users charges that both
robin hood and citadel deny
but the damage is done the lasting
legacy of the gamestock saga
may well be greater scrutiny if not an
outright ban
on this financial industry practice