Earlier quoted context omitted.
Possible but would require a licensed broker to break the law. It's like check kiting but with the aid of a broker the broker would have to credit your account shares that do not exist.
> In May 2012, lawyers acting for Goldman accidentally released an unredacted document revealing compromising internal discussions regarding naked short selling. "Fuck the compliance area – procedures, schmecedures", Rolling Stone Magazine quoted Peter Melz, the former president of Merrill Lynch Professional Clearing Corp. as saying in the document.
Robinhood is facing nearly 50 lawsuits over GameStop frenzy
61–70 of 166 posts
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#62Earlier quoted context omitted.
I'm not saying they used that tactic - but that the use of such tactics shouldn't be allowed.
The point is that the tactic isn't viable in the first place. It's almost like saying that we should ban people from making perpetual motion machines.
I'm also interested in discussing whether or not ETFs should exist. I wonder at some point if you just kind of eliminate price discovery and prop up zombie companies.
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#63I'm pretty skeptical of the negative attention Robinhood is receiving. It seems like the entities who actually acted in bad faith, the ones who attempted illegal shorts, are trying to divert attention. Like someone else said, Robinhood is just the fall guy here.
Then RH can sue them. As the consumer interface, the buck either stops with them, or they pass it along.
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#64I'm pretty skeptical of the negative attention Robinhood is receiving. It seems like the entities who actually acted in bad faith, the ones who attempted illegal shorts, are trying to divert attention. Like someone else said, Robinhood is just the fall guy here.
What illegal shorts? Short interest being above 100% of floatation can happen perfectly naturally without anything illegal being done.
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#65Earlier quoted context omitted.
> In May 2012, lawyers acting for Goldman accidentally released an unredacted document revealing compromising internal discussions regarding naked short selling. "Fuck the compliance area – procedures, schmecedures", Rolling Stone Magazine quoted Peter Melz, the former president of Merrill Lynch Professional Clearing Corp. as saying in the document.
> In May 2012
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#66Earlier quoted context omitted.
What illegal shorts? Short interest being above 100% of floatation can happen perfectly naturally without anything illegal being done.
Yeah, about as "perfectly natural" as the stock market soaring while the economy is in crisis (i.e. logical, but completely perverted).
Eg. those who shorted stock because they expected covid-19 to cause a market dip, sent a giant signal to the entire world that covid was going to be a big problem.
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#67The biggest problem most of the lawsuits face is that there is a provision in the Terms of Service that basically says that Robinhood can prevent you from trading in any stock it wishes. Any complaint that amounts to "Robinhood violated its contract" is going to go down in flames as a result--it didn't violate its contract; the people who are complaining didn't read the contract.
That really only leaves two kinds of claims that might have legs: arguing that Robinhood violated securities laws, and arguing conspiracy on the part of hedge funds. The first part is difficult to win on because many of the complainants will simply lack the standing to do so (you have to have owned the stocks in question and bought/sold at a manipulated price to show standing, and since the complaints are generally on the theme of "we tried to buy but couldn't", they fail that) [1]. The last one might survive until discovery if properly pled, but I sincerely doubt they'll ever eventually win it.
[1] One of the cases filed for a temporary restraining order mainly on the basis of the complaint. The judge found that the briefing didn't even meet the "raises serious questions" burden of proof, although they mentioned that the TRO failed really hard at the "suffered irreparable harm" part because losing money is pretty much by definition a reparable harm.
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#68I'm pretty skeptical of the negative attention Robinhood is receiving. It seems like the entities who actually acted in bad faith, the ones who attempted illegal shorts, are trying to divert attention. Like someone else said, Robinhood is just the fall guy here.
Robinhood deserves negative attention, but not for restricting trades to closing-ony. That appears to not have been much of a choice. They do deserve a lot of negative attention for running a brokerage in a way that invited a lot of risk-ignorant retail traders to instantly trade into leveraged positions for which they should never have been qualified in the first place. Robinhood has the valuation it does because it…
They clearly did not have the finances available to provide the service they offer. Regardless of whether that was forced on them, the outcome was RH's failures manipulating a market.
RH should be fined and sued out of existence.
I also don't see the value in short selling. Seems like a way to gamble legally in all 50 states.
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#69Earlier quoted context omitted.
Yeah, about as "perfectly natural" as the stock market soaring while the economy is in crisis (i.e. logical, but completely perverted).
why is shorting a company perverted? I would argue it's a great asset to society. Eg. those who shorted stock because they expected covid-19 to cause a market dip, sent a giant signal to the entire world that covid was going to be a big problem.
Re: Robinhood is facing nearly 50 lawsuits over GameStop frenzy
#70The far more damaging aspect is commercial: they're no longer the darling of r/WSB.