AOC considering hearing over RobinhoodApp decision to block purchasers of GME

https://twitter.com/AOC/status/1354830697459032066

by vinnyglennon • 5 years ago

219 65 5 years ago

twitter.com

s_dev2• 5 years ago

The fact that Ted Cruz and AOC completely agree on this shows you how unprecedented this all is.

threevox• 5 years ago

Exactly - it really feels like a watershed moment of some kind, though I'm not exactly sure how

Larrikin3• 5 years ago

It's a super simple non partisan issue that can get him some press that isn't about his sedition

pdevr2• 5 years ago

Agree. They, of course, have their own reasons for doing this. But regardless, I feel it is a very good thing to happen.

If influential people from both parties can work together for issues like this, it will make the world a better and fairer place for the middle class and the poor.

pdevr2• 5 years ago

And Rashida Tlaib and Donald Trump Jr too.

I am so glad to see legislators and politicians from both sides, regardless of their motivations, getting together on the side of the people.

For the people, you know.

danesparza2• 5 years ago

Wait -- Ted Cruz agrees with this? Do you have a tweet link or an article?

throwanem• 5 years ago

https://twitter.com/tedcruz/status/1354833603943931905

npmaile• 5 years ago

This has happened before, and is a great litmus test for something that is either very bad or very good.

koheripbal2• 5 years ago

More importantly, neither heads of the party agree. It's more like the extremists vs the centrists.

newacct583• 5 years ago

Yes, but... they're both wrong. The trades that Robinhood blocked were objectively bad trades, and the people they stopped from buying would almost certainly have lost all that money.

Now, I agree that there's a good first principles argument (and also a bad populist one) that people should be allowed to trade their own money into scams if they want. But the idea of proving damages here based on the idea that GME was going to CONTINUE TO GO UP after a 500% increase triggered by a short squeeze is just insane, sorry.

brentm• 5 years ago

"The trades that Robinhood blocked were objectively bad trades" Seriously? Do you want brokers making this call? That is not their job. Let people learn the hard way, that is what the markets are for. Now, don't let them do it on margin but if you're going to plow your savings into GME at $450 a share then I am sorry but it's your own fault for not doing any homework at all.

s_dev2• 5 years ago

"This is Wall-street Dr. Burry, if you offer us free money, we're going to take it"

The notion that an exchange would protect a trader from trades is laughably absurd.

adoxyz• 5 years ago

This is a bad take. There's millions of bad trades you can make. Should Robinhood block all of those as well?

snarf21• 5 years ago

What about the people that already bought through Robinhood and were trying to double down to maintain their position? Those people are being made to lose money too.

nemothekid• 5 years ago

This case is not about lost damages and I doubt that is the motivation for someone like AOC getting involved. The narrative surrounding this whole thing has become the little guys have pulled one over the hedge funds and now the wall street is changing the rules. The bad trade that was done here was when GME was shorted to 140%, and now that retail has made a win, everything is being done to save the shorts. All this is highlighting for many more people in how the "game is rigged".

divs1210• 5 years ago

Glad to know bad trades are illegal now. /s

Dirlewanger• 5 years ago

It reveals that the whole "left vs. right" culture war is a massive sham designed to occupy and waste the all the plebian's attentions and get eyeballs on advertisers while the rich and powerful sit back and laugh.

And people already downvoting me...lol. Do you not realize you're just willing pawns?

adventured2• 5 years ago

Wait a minute. Are those big tech hearings not going to amount to anything? Approximately the exact same thing AOC's fake hearing/s will amount to. It's nothing more than populist grandstanding.

lainga• 5 years ago

Cruz agrees with AOC. AOC took the opportunity to tell Cruz he "almost had me murdered 3 weeks ago":

https://twitter.com/AOC/status/1354848253729234944

tyrust• 5 years ago

Holding someone accountable for their actions longer than one press cycle is a good thing.

sgregnt• 5 years ago

It's not just Robingood! I'm on Schwab and they blocked trading with GME this morning (didn't try it but SELL might still be open)

smnrchrds• 5 years ago

I think TD Ameritrade did the same.

vorpalhex• 5 years ago

RobinHood had to of known this was a potential outcome or they actually have the most inept management possible. I don't know how they plan on weathering this storm given how much of a public enemy they've made themselves into overnight.

0x426577617265• 5 years ago

Such an ironic company name given the current situation.

karmakaze• 5 years ago

True colors.

purple_ferret• 5 years ago

You get what you pay for with a 'free' app

bordercases• 5 years ago

Trade execution was locked on TD Ameritrade (and I think Interactive Brokers?) as well.

tempaccount2342• 5 years ago

scotia itrade has also been reporting that they're down due to the volume of trades. The 'trade' button on the toolbar is gone...

but trades are still going through if you use the 'make a trade' option in the dropdown next to the trading account balances on the accounts screen

pretty sketchy

kllrnohj• 5 years ago

It was not. Margins & shorts were locked on TD Ameritrade, but you can still buy.

paulddraper2• 5 years ago

No, they charge.

Jonnax• 5 years ago

What can the financial services committee realistically do to Robinhood?

jhny• 5 years ago

Probably not much, but it's a clear sign that their users should go somewhere else.

modeitsch• 5 years ago

I hope that Robinhood will pay the price, It’s the same big tech problem

morpheuskafka• 5 years ago

Very strange, I would have expected the opposite reaction. Every time people lose money on Robinhood they blame them for not screening clients appropriately, letting them invest more than their risk tolerance, etc. This is definitely abnormal, speculative conditions (i.e. anyone who is a normal buy and hold, value, income, etc investor does not need to be entering a position on those stocks right now).

Personally, I think they should have left trading open in cash accounts, but it is completely reasonable to block purchases of high risk shares especially on margin. Same as many brokerages limit OTCs, penny stocks, F shares, etc.

If someone really wants to buy more, it only takes a few minutes to open an account with another online firm. If they hadn't allowed sales and potentially prevented someone from stopping a loss that would be a much bigger deal, but for some reason AOC specifically called this out as suspicious.

Lambdanaut• 5 years ago

If someone really wants to buy more, it only takes a few minutes to open an account with another online firm.

Apparently for most brokers there is a waiting period of multiple days before trading becomes available.

paulgb3• 5 years ago

The ironic thing is that the end result of this will probably be a ban on payment for order flow which will destroy the commission-free trading model. We’ll go back to paying $5/trade or whatever and everyone (except HFT) will ostensibly be happy.

akvadrako2• 5 years ago

It's not $5 a trade. Look at IBKR rates; most US trades are well under a dollar.

paulgb3• 5 years ago

It looks like on their pro product $1 is the minimum, so most retail trades would be $1 but not well under that. Their “lite” offering is free but subsidized by PFOF.

Out_of_Characte• 5 years ago

I would never have thought that the political divide would be broken by reddit/discord "amateur" investors. Ted Cruz, AOC, Donald trump jr (Shame on twitter for banning Trump) ALL agree that it is probaly morally wrong to prevent amateur traders from betting against hedge funds.

Hedge funds shouldn't be bankrupted by a single loss like this. Its unacceptable. Capitalistic greed shouldn't be bailed out, the people bailing them out shouldn't have a position on the issue as well.

kortilla4• 5 years ago

I hope she doesn’t get involved much. Her inquiries are less about fact finding and more about owning the corps because capitalism is bad.

This will just become a stupid political grandstanding forum.

piva002• 5 years ago

Objectively speaking, capitalism is quite bad for a lot of people. Might be one of the best systems we've ever came up with, it's still quite bad and needs some fixing.

kortilla4• 5 years ago

But that’s irrelevant for a case on possible corruption.

floor2• 5 years ago

I know everyone is excited to bring out their pitchforks, but let's take a moment to consider this from an objective position.

Imagine a broker knowingly profits from executing trades that are part of a market manipulation- the SEC can and does come after them with huge fines. Usually it's years later in the unwinding of some shady hedge fund or corrupt sovereign wealth fund or pump&dump operation.

In this case, it's not a boiler room in New Jersey or a Malaysian government insider manipulating the market, it's a bunch of different people on twitter and reddit. It seems perfectly reasonable that the brokerage firms who are complicit in this have legitimate fears that the SEC will come after them later, and so are trying to limit the risk that they're deemed culpable.

N1H1L2• 5 years ago

I agree with Robinhood's fears on principle. What however riles up people (legitimately IMO) is that larger funds making equally suspect trades are basically let off with a slap on the wrist.

A strong argument could be made that Tesla's stocks last year have been pumped up irrationally by funds last year too, and if a market correction comes the funds behind it will face zero to minimal consequences. Same in 2008.

At the end of the day, the differential rules for individual traders and big funds riles people up.

piva002• 5 years ago

How could they be liable though? This is a black swan, there were no risk models predicting this, Robinhood probably didn't have a policy for market manipulation done in a decentralised and diffuse way, probably because it was never done.

It's really hard to objectively defend Robinhood, it's not their job to be the gatekeeper for millions of small fish trading some peanuts. It's quite patronising.

AOC considering hearing over RobinhoodApp decision to block purchasers of GME

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