Aaron Brown, Columnist

Robinhood Is Not Gamifying Markets. It's Democratizing Them.

Despite the complaints by Massachusetts, the online brokerage firm has led a massively beneficial revolution in retail trading services.

December 17, 2020 at 5:00 PM UTC

By Aaron Brown

Aaron Brown is a former head of financial market research at AQR Capital Management. He is also an active crypto investor, and has venture capital investments and advisory ties with crypto firms. He is the author of the soon-to-be-released "Wrong Number."

The Robinhood investing app is coming under attack.
Photographer: Bloomberg

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Securities regulators in Massachusetts have decided to attack the popular online brokerage Robinhood Financial LLC, the latest in a long pattern of regulators harassing hugely beneficial innovations. Who can forget the early 1980s, when inflation was running at double-digit rates and banks were prohibited from paying interest on checking deposits, but the Securities & Exchange Commission was fighting money market funds?1

Robinhood led a movement to virtually eliminate commissions for retail traders, cut racial investing disparities in half and dramatically increase stock ownership among investors under the age of 40 and over 65. Its user-friendly interface and simple, clear, entertaining educational material set a standard that established brokers scrambled to meet.2