Analysis: Robinhood protected from lawsuits by user agreement, Congress • Hacker News Board

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

#271

Post by andrewflnr » Sun, Jan 31, 2021, 7:26 AM UTC

dane-pgp wrote: post #259

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.

Just to be clear, the DMCA is not the law you're thinking of: "Section 230 is a piece of Internet legislation in the United States, passed into law as part of the Communications Decency Act (CDA) of 1996 (a common name for Title V of the Telecommunications Act of 1996), formally codified as Section 230 of the Communications Act of 1934 at 47 U.S.C. § 230." https://en.wikipedia.org/wiki/Section_230

Oops, thanks.

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

#272

Post by andrewflnr » Sun, Jan 31, 2021, 7:27 AM UTC

pixl97 wrote: post #263

andrewflnr wrote: post #14

Earlier quoted context omitted.

> where if the company doesn't respond, they "lose" Ah, that sounds like something that should go nation-wide.

Ha, I was wondering why there was so much California hate from businesses. This explains some of it.

IME it's more stuff like the $800/yr franchise tax.

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

#273

Post by thunkshift1 » Sun, Jan 31, 2021, 9:18 AM UTC

MisterSandman wrote: post #267

jerry80 wrote: post #223

Earlier quoted context omitted.

Yes, and the manipulation doesn't only affect Robinhood customers.

This. It didn't just impact RH users, it impacted the stock price as a whole. Anybody who was holding the stock should be able to join the class action.

Whoa.. if that logic holds, it’ll be game over for almost all brokers who stopped trading.

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

#274

Post by 9387367 » Sun, Jan 31, 2021, 10:03 AM UTC

1vuio0pswjnm7 wrote: post #241

kleton wrote: post #3

Robinhood's vulnerability is their forced arbitration clause in the ToS. Similar to Doordash: https://www.vox.com/2020/2/12/21133486/doordash-workers-10-m...

The DoorDash plaintiffs had valid wage claims. Here, according to Reuters' analysis of the agreeement^1, RobinHood plaintiffs do not have a valid contract claim. There is no breach of contract because the agreement specifically allows for RH to silently refuse to execute orders. What can RH customers sue RH for? If there is no valid claim they can make, then there's no possibility of arbitration. 1. https://web.archi…

Are they allowed to refuse to execute one side of the trade while executing the other side?

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

#275

Post by birdsbirdsbirds » Sun, Jan 31, 2021, 10:05 AM UTC

maest wrote: post #205

sgregnt wrote: post #175

Earlier quoted context omitted.

This is tangential to RH, but never the less related issue: For many years now I was wondering how exectly the ETF work and whether when I buy an ETF I can be 100% sure the issuer can follow through on their obligations? What mechanism are there in place to insure that ETF will not deviate from the underlying stocks it should represent? I found it difficult to understand the intricacies related to this question. Here…

Each ETF share is backed by a unit of the underlying, so there's no price risk for the ETF issuer.

There are two kinds of ETF. Only one of them is operated like that. Check the fine print to be sure.

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

#276

Post by PartiallyTyped » Sun, Jan 31, 2021, 10:07 AM UTC

ycombobreaker wrote: post #256

PartiallyTyped wrote: post #215

Earlier quoted context omitted.

Ladder short attack caused the price to drop during the low volume. Every time artificial limits were imposed by RH, the price dropped in __all__ the restricted stocks. That is when they restricted shares to 0, or to 2, and subsequently to 1, and again to 0. On Friday, there were puts expiring and HFs stood to lose a lot, they didn't, and the answer is obvious as to why.

Everything I can find online about this "ladder short attack" points to the GME activity. Does anybody have any explanation for this that predates the last week? This is not the first short squeeze, nor the first outage for retail traders during a volatile period. The only explanation I see on reddit refers to hedge funds lowering their bids, which isn't sufficient to explain the market actually dropping (there were…

During the duration of restricted flow there were 800K shares sold at $120 and $140 in two batches on Thursday, significantly lower than the market price, infact, whoever sold them got sold them at 300M less than market value. This sudden drop caused the price to fall and trigger stop losses. This happened before.

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

#277

Post by _trampeltier » Sun, Jan 31, 2021, 11:05 AM UTC

OldHand2018 wrote: post #266

LatteLazy wrote: post #255

Earlier quoted context omitted.

Jesus. I think I was so lucky to fall into mostly doing front office. Everything back office is like legacy software only it's people and business processes. Good knowledge, if never have guessed it was so recent!

Stock trading kind of skyrocketed in the late 1960s. It got to the point where the NYSE had to close on Wednesdays just to catch up with the all the trading paperwork from Monday and Tuesday (Thursday and Friday was handled over the weekend). This led to brokerages buying computers to start to manage everything, just in time for trading volume to crash around 1970 and brokerages going bankrupt left and right because…

Is there a good source for the technical history about exchanges? Would love to know more about it.

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

#278

Post by kasey_junk » Sun, Jan 31, 2021, 11:38 AM UTC

pfisch wrote: post #269

kasey_junk wrote: post #262

Earlier quoted context omitted.

Are you suggesting RH should have only restricted new positions to people that A) hadn’t added new money to their accounts and also B) hadn’t liquidated any other positions in the last 2 days? I suppose you could make that argument and if you wanted to encode that as law I wouldn’t vote against it, but recognize it’s going to manifest in brokerage behavior where you can’t trade as fast or you have to keep more cash i…

I mean most normal brokerage accounts clearly show you when you are buying on margin and exactly how much settled cash you have to trade with. This is not unreasonable, and as far as I am aware is the status quo.

Both my Vanguard and Fidelity brokerage account lets me immediately trade with funds from trades prior to them settling with the DTCC. I don’t see any indication in their GUI (maybe I’m missing it?) that the trades are anything but complete once the orders are filled.

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

#279

Post by oblio » Sun, Jan 31, 2021, 1:05 PM UTC

LatteLazy wrote: post #117

why_Mr_Anderson wrote: post #30

In Europe, mandatory arbitration are usually unlawful. European Union Council Directive 93/13 on Unfair Terms in Consumer Contracts creates a rebuttable presumption that pre-dispute arbitration clauses in consumer contracts are invalid. The reason is the unequal bargaining power between the contracting parties in consumer contracts.

I don't necessarily support forced arbitration but... I would rather not pay the court fees because a bunch of people are upset their broker didn't accept their orders and want to waste the courts time over it.

> I would rather not pay the court fees because a bunch of people are upset their broker didn't accept their orders and want to waste the courts time over it.

I like how you trivialize it. Didn't they lose a ton of money, potentially their savings, because "their broker didn't accept their orders"?

Repeat that several times in your head, how does it sound?

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

#280

Post by PartiallyTyped » Sun, Jan 31, 2021, 1:10 PM UTC

PartiallyTyped wrote: post #215

LatteLazy wrote: post #112

Earlier quoted context omitted.

Yes, because if they'd bought more they'd have lost money, and RobinHood only stopped them buying. "but we could have driven the price up by cornering the market" I hear RobinHood/WSB users say. Maybe, but that would be illegal market manipulation. So if your case is that you lost out because RobinHood wouldn't facilitate a crime, you have a poor case.

Ladder short attack caused the price to drop during the low volume. Every time artificial limits were imposed by RH, the price dropped in __all__ the restricted stocks. That is when they restricted shares to 0, or to 2, and subsequently to 1, and again to 0. On Friday, there were puts expiring and HFs stood to lose a lot, they didn't, and the answer is obvious as to why.

Since apparently I can't edit my comment, here is an interesting read: https://www.reddit.com/r/wallstreetbets/comments/l9auf5/impo...