Robots Fined for Making Humans Pay Too Much Tax
Plus, Republicans declare war on the SEC.
Number of the Week: 3 billion (explanation below)
Robots Fined for Making Humans Pay Too Much Tax
The world has been so tumultuous over the last year or so that FIN has paid little recent attention to some of the fintech services, such as roboadvisors, that led us to create this newsletter back in 2020. This week, tens of millions of American households filed their income tax returns, and it can’t be a coincidence that the Securities and Exchange Commission (SEC) went after a fintech pioneer on tax grounds. Specifically, the SEC charged Betterment, one of the first and largest roboadvisors, with misleading its customers about “tax-loss harvesting,” the practice (in this case automated) of selling securities in a manner timed to minimize capital gains tax.
What did Betterment do wrong?