Robinhood is facing nearly 50 lawsuits over GameStop frenzy

Post by [deleted] » Wed, Mar 03, 2021, 1:04 PM UTC

a254613e wrote: post #12

dmos62 wrote: post #8

Earlier quoted context omitted.

For the record, why did Robinhood stop the trading? I know there's been an uproar, but due to the volume of articles it's been difficult to get a clearheaded idea of why Robinhood actually did it.

Liquidity issue. Or rather, extremely close to it. The CEO said he "doesn't want to use the L word" to describe it. Basically they had to cover/deposit the purchase trades themselves, before they ran out of money to do so (liquidity issue) they shut down purchasing - then went on record on CNBC etc claiming that it's not a liquidity issue. Interview with the CEO https://youtu.be/LqoJApzkaPU?t=404 where he confirms th…

Post by joncrane » Wed, Mar 03, 2021, 1:06 PM UTC

kmlx wrote: post #13

vga805 wrote: post #4

Earlier quoted context omitted.

Multiple brokerages shut down buying due to the collateral requirements that were raised. Robinhood seems like the fall guy here, hopefully people start asking the right questions about the collateral and the manipulation there.

other brokerages simply put up the money. this meant that while huge swaths of the retail investors in the US (and parts of Europe) were not allowed to buy GME, other retail investors had no issues. to top it off, certain brokerages only allowed sell orders. this meant a huge imbalance in the market. i really don’t get how this is legal and why heads aren’t rolling. case in point: saxo bank let me trade GME without a…

Post by Railsify » Wed, Mar 03, 2021, 1:17 PM UTC

VoodooJuJu wrote: post #11

I'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.

Post by pjc50 » Wed, Mar 03, 2021, 1:20 PM UTC

VoodooJuJu wrote: post #11

I'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.

Post by xadhominemx » Wed, Mar 03, 2021, 1:24 PM UTC

trestenhortz wrote: post #6

vga805 wrote: post #4

Earlier quoted context omitted.

Multiple brokerages shut down buying due to the collateral requirements that were raised. Robinhood seems like the fall guy here, hopefully people start asking the right questions about the collateral and the manipulation there.

That is absolutely not the reason that they publicly stated they stopped allowing purchasing and only allowed selling. I’d dance on the grave of this company.