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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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Loss of an unlawful gain wouldn't be an actionable harm in any case. "I intended to buy at a higher price in order to manipulate the price of an asset well above its value, and was harmed by being delayed until a later time where I could buy it at a lower price" -- not going to fly. If RH is inadequately disclosing the risks of margin trading then some of their customers that had positions closed due to margin requir…
The vast majority of GME buyers could never be considered guilty of unlawful market manipulation. "I intended to buy the stock because I thought it would go up" is a pretty good reason. (OTOH I don't really believe such investors have a strong case against RH).
"I was harmed because I was delayed from buying at a higher price and instead could only buy at a lower price later!" -- only being able to buy at a lower price later is only a "harm" in the sense that it prevented price manipulation.
You can not overwrite a law by making anybody signup user agreement. This was clearly a stock manipulation played in our faces, no need o prove anything. Only left is to see if the justice exist in EEUU.
Why can't non-Robinhood holders of GME sue Robinhood, though? If you can prove that RH's actions drove the stock down, then aren't they the victims (and also not bound by the user agreement)?
>If you can prove that RH's actions drove the stock down That'd at best, prove harm, which is a necessary but not sufficient condition for a successful lawsuit. You'd also need to prove wrongdoing, which is hard because they seemed to have acted so they can fulfill their deposit requirements.
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 won’t go out of business because of lawsuits, it’ll be an exodus of users. I would imagine most users care more about money and convenience than principles. I doubt they lose many users in the long run. If the bubble or market crashes though they will lose a large user base for a long period of time.
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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.
Just curious -- why not?
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They are the number 1 app in app stores right now. People are morons. They're not going out of business anytime soon.
They are the #1 app because people were interested in trading GME, and the network effect led to lots of recommendations to download robinhood. Now there is a very negative sentiment towards robinhood. Very few people online will recommend it. Worth noting that Webull, a robinhood competitor, is the #2 app in the play store. They initially restricted stocks but later allowed people to freely buy and sell.
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…
This is a very good point, the question is where to go? I am European, we don't even have Robinhood here, so I had a dead eToro account with 140 EUR on it and Interactive Brokers, which we all thought was synonymous with quality and respect. However, they folded first, along with Degiro, which was the other "well-reputed" option available to us. Everyone started running to XTB, which limited trading on Friday afterno…
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I don't trade stocks at all, I just played a bit around with crypto for some years. For me it seems, as traditional stock exchanges looks like in stone age compared to the crypto world, when I really need days to make the deal in the background. Also then I don't understand how it needs one one side days to make the deal and on the other side there exist HF traders, who do many, some say as many as 1000 trades per se…
I agree broadly. I think it's just institutional momentum. We could do settlement within minutes for 99% of trades. The only reason we haven't is because 100+ years ago people though 2 days (T+2) was quick and we haven't updated it. The EU is gradually forcing its members to do T+1 and eventually (I think decades in the future) wants same day for most products. That reduces risk and it makes the market fairer (RobinH…
T+2 has been around since 2017, not for 100 years. It was T+3 before that in the US. Before computers were in use, I believe it took 2 weeks and was gradually reduced to T+3 during the 70s and 80s.
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There are definitely same claims for harm that are stronger than others. Whether any of the 6 (!) class action suits currently pending actually claim that harm is a different matter. Of the stuff I see on court listener: * 3 don't have documents available (and I'm not going to bother signing up for PACER just to find out) * 1 has a claim predicated on "I could have bought or shorted GME" (yeah, not gonna fly) * 1 has…
You should sign up for PACER. It's easy (although the web interface is horrible) and costs basically nothing at the scale you'd be using it at. It's one of those things you won't use often but you'll be happy you set it up, like, a couple times a year.