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Analysis: Robinhood protected from lawsuits by user agreement, Congress

reuters.com

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Re: Analysis: Robinhood protected from lawsuits by user agreement, Congress

#141

Post by the-dude »

jsonne wrote: post #115
ericmay wrote: post #4

Robinhood won’t go out of business because of lawsuits, it’ll be an exodus of users. Even if they just weren’t prepared and everything they did was legitimately the right thing to do, that ship has sailed. I know people I didn’t even know had a Robinhood account ask me if I was shutting my account down too. This will be fascinating to watch. Can the repair the brand damage? I’m skeptical. Is there any similar scenari…

Robinhood canceled my GME calls orders at 1am and sent a message confirming that I canceled them (I didn't). Doesn't matter if they're technically in their rights or not the trust is shattered and I'm closing my account. Everyone else even in IRL spaces agrees with the sentiment. Anecdotally my barista at my local coffee spot told me to move to Webull or another platform so the sentiment seems to be widespread.

Isn't the saying that if your taxidriver or shoeshiner starts talking about the stock market, it is time to get out?

Do we need to add barista's to the list?

Re: Analysis: Robinhood protected from lawsuits by user agreement, Congress

#142

Post by capableweb »

tptacek wrote: post #120
codesternews wrote: post #74

Earlier quoted context omitted.

This time it is different. Previously they had glitches etc. This time they by choice restricted users which lead their users loose. Whole concept they broke. If any investor still uses robinhood they are stupid. Your money and stock is not safe with Robinhood. They can restrict you any time.

Your claim that RH restricted users by choice seems false. RH is required by NSCC/DTCC rules to post collateral for trades in the process of settlement. As a result of volatility, the collateral requirements for meme stocks shot up from something like single digits to something perhaps approaching 100%. Robinhood was apparently forced to draw down a $600MM line of credit just to cover the trades it had already allowe…

Sounds like Robinhood was setup to fail from the beginning, if so. If you make it as easy as possible to do trades but then start getting "rate-limited" essentially, it was never gonna scale in the first place.

Gonna be interesting to see what gets to replace Robinhood for easy and reliable trades in the future.

Re: Analysis: Robinhood protected from lawsuits by user agreement, Congress

#143

Post by tptacek »

capableweb wrote: post #142
tptacek wrote: post #120

Earlier quoted context omitted.

Your claim that RH restricted users by choice seems false. RH is required by NSCC/DTCC rules to post collateral for trades in the process of settlement. As a result of volatility, the collateral requirements for meme stocks shot up from something like single digits to something perhaps approaching 100%. Robinhood was apparently forced to draw down a $600MM line of credit just to cover the trades it had already allowe…

Sounds like Robinhood was setup to fail from the beginning, if so. If you make it as easy as possible to do trades but then start getting "rate-limited" essentially, it was never gonna scale in the first place. Gonna be interesting to see what gets to replace Robinhood for easy and reliable trades in the future.

Don't let me come across like I'm defending Robinhood, which is an online casino dressed up to look like an investment application.

Re: Analysis: Robinhood protected from lawsuits by user agreement, Congress

#144

Post by inkaudio »

tptacek wrote: post #120
codesternews wrote: post #74

Earlier quoted context omitted.

This time it is different. Previously they had glitches etc. This time they by choice restricted users which lead their users loose. Whole concept they broke. If any investor still uses robinhood they are stupid. Your money and stock is not safe with Robinhood. They can restrict you any time.

Your claim that RH restricted users by choice seems false. RH is required by NSCC/DTCC rules to post collateral for trades in the process of settlement. As a result of volatility, the collateral requirements for meme stocks shot up from something like single digits to something perhaps approaching 100%. Robinhood was apparently forced to draw down a $600MM line of credit just to cover the trades it had already allowe…

This is for stock sales which they did not restrict. Robinhood stopped the purchase of stock which does not require a collateral because the money is coming directly from the users cash balance. Don’t believe whatever they say, RH action was specifically to stop the short squeeze.

Re: Analysis: Robinhood protected from lawsuits by user agreement, Congress

#145

Post by capableweb »

Daho0n wrote: post #56
vertis wrote: post #36

Earlier quoted context omitted.

Yes, this[1] was the one that I found when searching. It shows that Robinhood is it's own, but as we know they route to Citadel. A bunch of others had a problem when Apex Holdings told them to restrict trading (or something along those lines). [1]: https://investorjunkie.com/stock-brokers/broker-clearing-fir...

How come it works from all the way over here in Scandinavia? No problems with GME while RH was shutting it down. Also, Robin Hood - the irony. They are clearly for the rich against the poor. More like the sheriff of nottingham!

I'm also in a European country and using my national bank for trading. In the end, my bank is using JP Morgan for NYSE trades, so in the end would be up to JP Morgan to block trades. But everything seems to have worked fine here all week.

Re: Analysis: Robinhood protected from lawsuits by user agreement, Congress

#146

Post by pfisch »

tptacek wrote: post #120
codesternews wrote: post #74

Earlier quoted context omitted.

This time it is different. Previously they had glitches etc. This time they by choice restricted users which lead their users loose. Whole concept they broke. If any investor still uses robinhood they are stupid. Your money and stock is not safe with Robinhood. They can restrict you any time.

Your claim that RH restricted users by choice seems false. RH is required by NSCC/DTCC rules to post collateral for trades in the process of settlement. As a result of volatility, the collateral requirements for meme stocks shot up from something like single digits to something perhaps approaching 100%. Robinhood was apparently forced to draw down a $600MM line of credit just to cover the trades it had already allowe…

Yeah....except all the more legitimate brokerages didn't limit anything. TD Ameritrade made me place limit orders, but that is not even close to the same thing.

Fidelity was unaffected.

Re: Analysis: Robinhood protected from lawsuits by user agreement, Congress

#147

Post by bena »

vertis wrote: post #25
ericmay wrote: post #4

Robinhood won’t go out of business because of lawsuits, it’ll be an exodus of users. Even if they just weren’t prepared and everything they did was legitimately the right thing to do, that ship has sailed. I know people I didn’t even know had a Robinhood account ask me if I was shutting my account down too. This will be fascinating to watch. Can the repair the brand damage? I’m skeptical. Is there any similar scenari…

I don't have a Robinhood account, and I'm not involved in the GME/WSB stuff, but I would think twice about opening a Robinhood account now. Indeed, it's been educational about which brokers are using other clearing houses (sorry if I get the terminology wrong), and which are direct. But then badly behaved businesses like Godaddy don't seem to suffer or go out of business, so I suspect Robinhood won't have too many lo…

I've seen people who opened RobinHood accounts after all of this debacle with the forced selling of shares, etc.

Re: Analysis: Robinhood protected from lawsuits by user agreement, Congress

#148

Post by scsilver »

lucasyvas wrote: post #24
andrewflnr wrote: post #19

Who is trying to sue Reddit for this? Bringing them up just sounds like building a case for repealing Section 230 of the DMCA, which would be a disaster but nevertheless seems to have bipartisan support.

I'm all for it at this point - it will push to decentralized infrastructure, which the Internet was meant to be in the first place.

Decentralized infrastructure with equal access is the solution to avoiding legislation here, people should be able to access the public forum and markets and companies should have the right to not associate with individuals not protected by human rights laws. Technology can solve this, and we are seeing money being spent towards this decentralization flooding towards building it just in 2021 alone. Interesting to see how a battery of solar houses + starlink + a drone port could allow decentralized communes to start popping up.

Re: Analysis: Robinhood protected from lawsuits by user agreement, Congress

#149

Post by un-devmox »

tptacek wrote: post #120
codesternews wrote: post #74

Earlier quoted context omitted.

This time it is different. Previously they had glitches etc. This time they by choice restricted users which lead their users loose. Whole concept they broke. If any investor still uses robinhood they are stupid. Your money and stock is not safe with Robinhood. They can restrict you any time.

Your claim that RH restricted users by choice seems false. RH is required by NSCC/DTCC rules to post collateral for trades in the process of settlement. As a result of volatility, the collateral requirements for meme stocks shot up from something like single digits to something perhaps approaching 100%. Robinhood was apparently forced to draw down a $600MM line of credit just to cover the trades it had already allowe…

Why did the collateral requirements shoot?

Re: Analysis: Robinhood protected from lawsuits by user agreement, Congress

#150

Post by jonp888 »

inkaudio wrote: post #144
tptacek wrote: post #120

Earlier quoted context omitted.

Your claim that RH restricted users by choice seems false. RH is required by NSCC/DTCC rules to post collateral for trades in the process of settlement. As a result of volatility, the collateral requirements for meme stocks shot up from something like single digits to something perhaps approaching 100%. Robinhood was apparently forced to draw down a $600MM line of credit just to cover the trades it had already allowe…

This is for stock sales which they did not restrict. Robinhood stopped the purchase of stock which does not require a collateral because the money is coming directly from the users cash balance. Don’t believe whatever they say, RH action was specifically to stop the short squeeze.

This is just not true. They do have to post collateral for purchases, and the customer's own money cannot be used as the collateral.
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