Mar. 31, 2023
Dear Sec Commissioner, I am writing to express my concern about the failure of some brokers to meet their best execution obligations and the resulting negative impact on investors. Recently, there have been several cases of brokers not fulfilling their obligation to execute trades in a manner that is in the best interest of their clients. In December 2020, Robinhood was charged by the SEC with failure to satisfy its best execution obligation, resulting in a significant loss of $34.1 million for its customers. Robinhood was found to have made misleading statements and not disclosed payments received for routing trades to specific firms. This is a clear example of brokers not acting in the best interest of their clients. Furthermore, Citadel paid the SEC $22.6 million in 2017 to settle best execution charges for executing customer trades at less favorable pricing when a better price was available. It is clear that the issue of best execution is not limited to Robinhood alone. Brokers recommending mutual funds with 12b-1 fees and revenue-sharing arrangements with clearing brokers have also faced the best execution charges from the SEC. This highlights the need for greater transparency and accountability in the practices of broker-dealers. As a concerned investor, I strongly believe that quarterly reviews of execution quality would provide transparency and accountability for the broker-dealers' practices. This would help ensure that they are fulfilling their obligation to execute trades in the best interest of their clients and prevent any future losses due to improper execution practices. I urge the SEC to take appropriate action to ensure that all broker-dealers are fulfilling their best execution obligations and to promote greater transparency and accountability in the industry. Investors deserve to have confidence in the fairness and integrity of the market. Sincerely, Househodl Investor.