How Robinhood became an obsession — Wall Street power moves — Gorman’s big raise

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Happy Saturday, and welcome to Insider Finance. Here’s a rundown of the must-know stories from the past week:


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Generation Robinhood: How the trading app conditioned inexperienced users to obsessively play the market

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The app aims to make trading easy and fun for a simple reason: The more users trade, the more money Robinhood makes. The startup’s business model, in fact, is based in large part on what is known as payment for order flow (PFOF) — taking the buy and sell orders that users place and selling them directly to large trading firms.

More stories on the retail-trading frenzy:

How a decade of repairing Morgan Stanley after the financial crisis made James Gorman the highest-paid CEO on Wall Street

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Morgan Stanley was nearly toppled by subprime mortgage exposure during the financial crisis. In 2020, Morgan Stanley inked big deals for E-Trade and Eaton Vance and raked in record revenue. CEO James Gorman is now the highest paid bank exec on Wall Street, and the firm recently named a bumper class of new MDs.

Here’s how the bank remade itself over the past 10 years, and why CFO Jon Pruzan told us that it’s ready for a big growth push.

More stories on Morgan Stanley:

GameStop-ravaged Melvin Capital has an unlikely investor — the partners at the Silicon Valley VC Sequoia Capital that backs retail-trading app Robinhood

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As an army of retail traders took on some of Wall Street’s biggest names, one of Silicon Valley’s most storied investment firms found itself with money on both sides of the trade.

Sequoia Heritage, an under-the-radar endowment-style fund at the venture-capital firm, was an early investor in Melvin Capital.You can get the full rundown here.

Goldman Sachs names Susie Scher as chairman of its global financing group, and lays out other changes in investment-banking leadership

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Goldman Sachs on Wednesday told staff about leadership changes within its investment bank. Susie Scher and Vivek Bantwal will become chairman and cohead of global financing, respectively. Akila Raman, formerly the COO of global financing, will become COO of the investment bank.

More Goldman news this week:

Visa just launched a pilot program to help fintechs offer crypto trading, and its first partner is a digital bank focused on the Black community

Donald Hawkins CEO First Boulevard
Donald Hawkins, CEO of First Boulevard First Boulevard

The payments giant announced Visa Crypto APIs, a set of application programming interfaces that allow Visa’s fintech customers to offer the ability to buy, custody, and trade digital assets held by Anchorage, a federally-chartered digital asset bank.

First Boulevard, a digital-only bank with a goal of increasing financial empowerment in the Black community, is the first customer to use Visa Crypto APIs.

Visa expects to make a wider launch of the APIs later this year.

Kirk McKeown is leaving Steve Cohen’s Point72, the second senior data exec to depart the hedge fund recently

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FILE PHOTO: Hedge fund manager Steven A. Cohen, founder and chairman of SAC Capital Advisors, responds to a question during a one-on-one interview session at the SkyBridge Alternatives (SALT) Conference in Las Vegas, Nevada May 11, 2011. Steve Marcus/Reuters

Another senior Point72 data executive is departing the hedge fund. Kirk McKeown, who led proprietary research, is leaving to start a business, sources told Insider. In December, Matthew Granade, who oversaw the fund’s data efforts, left amid a firm reorganization.

Other hedge fund news:

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