The founder of the online broker Robinhood, Vlad Tenev, compared buying stocks to online shopping. In an interview with Bloomberg, he said that investing in securities should eventually become as commonplace as shopping in online stores.
“I reject the idea that financial investment in the United States is a gamble,” he announced and wished more people to enter the financial markets: not 50 percent of American households as it is now, but 95 percent.
In early February, Robinhood found itself at the center of yet another scandal: the broker was sued after the death of an inexperienced investor. We are talking about the death of 20-year-old trader Alexander Kearns, who committed suicide after seeing a negative cash balance of $ 730,000.
In fact, it turned out that he had no debt: the student misunderstood the information about his positions on derivative financial instruments. However, Kearns could not contact support for several days and eventually decided to commit suicide. In his farewell note, he wrote: “How could you provide millions of dollars of leverage to a twenty-year-old boy without any income?”.
Robinhood was also involved in a traders’ riot with Reddit, which provoked a rapid increase in the prices of shares of several companies, including online video game store GameStop. Many private investors have used Robinhood for trading. At the end of January, the broker even imposed a ban on the purchase of shares of GameStop and AMC Entertainment, but the restrictions were lifted by the beginning of February.