Retail trading, in the age of the COVID-19 pandemic, has reached impressive and consequential levels, mostly due to the rise in popularity of online investing platforms. These platforms greatly increase the accessibility of the stock market and the ability to create wealth for young investors. However, this recent surge in activity has dramatically affected the stock market in various ways and led to many negative outcomes for retail investors themselves. This Note uses several examples, surrounding the use of the platform Robinhood, to argue for action by the SEC and FINRA to implement additional protections for retail investors who utilize such platforms. Specifically, this Note calls for FINRA to modify its existing rules regarding account opening and approval and to provide a more detailed account approval process. This Note also argues for required education for retail investors looking to access certain complex and high-risk trading products.
Retail Investors: Why Online Investing Platforms Need More Regulation and Oversight,
16 Brook. J. Corp. Fin. & Com. L.
Available at: https://brooklynworks.brooklaw.edu/bjcfcl/vol16/iss1/13