Nothing is truly free. “Free shipping” just means the shipping costs have been factored into the price. “Free streaming service” just means you pay for it with your time watching commercials. Free toasters, free trips, free timeshares: You’re paying for all them somehow, because nothing is actually free.

Which brings us to the concept of free stock trades. Sure, you can log on to your Schwab or TD or Robinhood account and buy or sell a share commission-free, if in fact the service of your choice is able and willing to make the trade you’d like. And this may seem genuinely free, since rules and regulations of course require those platforms to conform with “best execution obligations,” one of which is getting a customer the best price possible. So, here’s something that’s truly free, yes?

Well, the fact that Robinhood, et. al.’s trading costs are eagerly covered by the execution firms paying for that order flow is a pretty good sign that, yea, nothing is truly free. And in the wake of l’affaire GameStop—and the forced retirement from public service of one Jay Clayton—this incongruity has finally occurred to the Securities and Exchange Commission, with a little nudge from an old friend, of course.

“When big sharks like Citadel and Robinhood come out ahead no matter what happens, and when the information they gather isn’t disclosed, and when it’s secret how that information is used, it’s easier for these giants to skim off the top at the expense of small investors,” the Massachusetts Democrat said in a Senate Banking Committee hearing on wild market swings in shares of the gaming retailer and other stocks.

In a letter made public Tuesday, SEC Acting Chairwoman Allison Herren Lee said regulators should examine such arrangements to make sure practices are fully disclosed and “consistent with best execution obligations….” Ms. Lee’s letter also said the SEC should consider new regulations, such as greater disclosure of short selling and steps to ensure small investors understand how options work.

GameStop Saga Prompts SEC to Weigh Review of Payment for Order Flow [WSJ]
Warren Says ‘Sharks’ Citadel, Robinhood Prey on Customers [Bloomberg]

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