We Are Preparing a Class Action Lawsuit Against Robinhood

https://old.reddit.com/r/wallstreetbets/comments/l6yrs3/we_are_preparing_a_class_action_lawsuit_against/

by f430 • 5 years ago

982 435 5 years ago

old.reddit.com

This. If your business is to provide a trading platform, you can't forbid your clients of doing the business they want, with their money. You step in the middle of the process, you're liable for your interference.

CameronNemo2• 5 years ago

The thing is ... If you don't step in, you could be liable. Let's not pretend that US financial regulation is fairly, evenly, or even logically applied.

offby37years2• 5 years ago

Liable for what exactly in this instance?

vorpalhex3• 5 years ago

My understanding is that brokerages are generally not liable for what happens on their platform so long as they ensure trades remain legal (eg margin requirements) and they don't make false promises and keep appropriate disclaimers.

On the other hand, manipulating the market seems like a good way to lose a business.

mywittyname3• 5 years ago

I could see the case if trading for the stock was halted, they'd be liable for the inaction of continuing to allow trades on the platform.

But this is straight-up market manipulation. There's no justifiable reason to halt trading on GME except as a means of cooling the market long enough for Important People to exit their bleeding positions.

There's a big ass disclaimer that you sign saying that markets fluctuate and that Robinhood isn't liable for losses of capital.

csomar2• 5 years ago

The SEC or the exchange (ie: Nasdaq) should be the one to step in. They are the ones concerned.

paulddraper5• 5 years ago

you could be liable

What is a brokerage liable for by doing their job?

xirbeosbwo12345• 5 years ago

Of course you can. Happens all the time.

with their money

With your money. Most people are trading on margin, because they're gambling addicts.

EDIT: I'm not sure if it's most that are trading on margin. Certainly it's everyone I've seen, but people who share their trades publicly are probably not representative.

vorpalhex3• 5 years ago

Very few retail investors trade on margin as it includes the brokerage holding on to significant amounts of your assets which many small retail investors just don't have.

ogre_codes9• 5 years ago

Robinhood could put a margin freeze on trading these stocks on margin or borrowing against shares of GME. It would protect them and be fair to retail investors.

Spivak2• 5 years ago

No you really can't. The right to refuse service gets weird with trading platforms because if you're found to be doing because you're trying to influence the market then you're in hot water.

Can you imagine a trading platform just outright refusing to process your orders because it was better for them?

albertgoeswoof• 5 years ago

So just disable the margin trading instead of blocking all Buys?

kllrnohj3• 5 years ago

I think you're confusing options with margin. Most of the major WSB screenshots are options trading and are not on margin. Specifically they are nearly all call options being posted, which pose no risk to the brokerage.

newacct5833• 5 years ago

Counterpoint: virtually everyone who would have been buying GME yesterday based on the pump nonsense would have lost all that money. Consumer platforms can likewise be understood to have an obligation to protect their customers from scams, and to the extent they don't they can also be reasonably held liable.

Basically: there's a reason for these trading controls to exist. And I really think people here are getting ahead of their skis. Almost everyone screaming about sticking it to Melvin is, as I see it, a victim of a trading scam.

Melvin seems to have lost a lot of money, sure, but... so have all the WSB folks. Very, very few people are going to come out of this ahead (and realistically some of those are going to end up in jail).

bufferoverflow2• 5 years ago

virtually everyone who would have been buying GME yesterday based on the pump nonsense would have lost all that money

That's not true. Today the stock went higher than at any point yesterday.

unethical_ban4• 5 years ago

Counterpoint: You are assuming good faith behavior in RH, where I see blatant fraud. It is outright market manipulation that they stop people from buying, but not selling. That they stopped individuals like me, who know the risk and can afford the loss, while allowing their hedge fund buddies to buy the dump and cover shorts.

As for "this would have happened anyway", well that doesn't sound very free market to force the very thing you claim to be trying to stop. RH says "oh no we don't want you to lose money, so we're going to cause a crash on the stock. Feel free to sell".

It's rotten to the core.

tinyhouse4• 5 years ago

That's true. Most people involved are driven by profit, not by screwing up hedge funds. Trading controls are important but it's problematic that Robinhood has this kind of power. That's usually something that exchanges control.

ogre_codes9• 5 years ago

Basically: there's a reason for these trading controls to exist.

There is a reason for trading controls by a neutral third party. Trading controls created and manipulated by a stakeholder is market manipulation and illegal.

cmdli3• 5 years ago

Legally speaking, Robinhood is a private entity with no obligations to provide users the ability to trade. Users can still sell or trade their assets out of Robinhood, they just can't open new positions with Robinhood's platform. Users are free to use another platform if they so wish.

Not saying its moral or not incredibly corrupt, but I can definitely see Robinhood having the legal equivalent of "our platform, our rules" here.

csomar2• 5 years ago

Legally speaking

Do you actually know the rules? Brokers are highly-regulated, and their job is to give a fair trading platform.

rblatz• 5 years ago

Except that it is clearly market manipulation.

harshalizee• 5 years ago

No they don't. All trading platforms are bound by SEC and federal regulations. The terms "broker" and"market maker" aren't slang words. There are strict requirements for platforms who do business under these financial titles.

totalZero5• 5 years ago

Nah. FINRA and the SEC eat this kind of argument for lunch. It's Robinhood's platform, but they have to follow the law just like anyone else.

"Fair, orderly, and efficient markets" doesn't mean that you take away someone's seat at the table just because he's winning. If it were Pershing Square driving the long side instead of r/WallStreetBets, there's no chance in hell that Goldman (Ackman's PB if I'm not mistaken) would block opening trades.

throw_m2393392• 5 years ago

Legally speaking, Robinhood is a private entity with no obligations to provide users the ability to trade.

This is mostly false. trading platforms are regulated by a bunch of orgs like the SEC, they absolutely cannot do whatever they want, there are heavy regulations on these activities or it would be easy for a broker to scam their clients out of their money with backroom deals with this or that third party and create conflict of interests.

pyrrhotech3• 5 years ago

Perhaps that's the way a broker should be, but what Robinhood, TD and other brokers did is 100% legal and has been done thousands of times in the past. There's absolutely nothing new or illegal about brokers using their discretion to restrict trading of any stock or asset at any time for any reason.

dehrmann• 5 years ago

With the risky bets Robinhood encourages, this is an interesting time to get a conscious. At lest the WSB crowd sort of knows what they're doing--it's not like the guy who committed suicide.

malandrew2• 5 years ago

But they didn't restrict the trading of stock. They restricted the buying of stock. People were still able to sell. Blocking only one side of the transactions is blatant market manipulation.

kllrnohj3• 5 years ago

TD's restrictions were on margins & shorts, which both put the brokerage itself at risk. They did not restrict general or options trading.

PKop3• 5 years ago

"It's fine as long as they do it legally"

Why is this the pertinent question? Even if it wasn't legal, they would just re-interpret the rules in their own favor.

Additionally, this is presented as if any of us had any say whatsoever in the writing of these laws or their enforcement or non-enforcement.

It's a distinction without a difference. It implies that "if we don't like it we should change the laws". But none of us wrote the laws in the first place, and certainly if we had the power to change the laws we never would have written them this way. If we had the power to change the laws we would change them. So it's an irrelevant point.

The entire point of the situation is "these are the laws" either officially, or unofficially but in practice.

ta12345678904• 5 years ago

Unfortunately, RH most likely made the decision already taking into account the potential costs of making it (including lawsuits and fines by regulators). Their alternative was probably “biting the hand that feeds them”, hence more likely an existential risk to them.

Being cynic about it, nothing of consequence will come out of this. RH will just pay up and continue business as usual. WallStreet will have successfully crushed the little guys, ironically, doing the same they are complaining about, market manipulation. And in the future people will think twice before attempting something like this again.

martinni2• 5 years ago

I’m not sure it’s that simple. They pissed off their most loyal and active customers. I doubt they’ll be back. What to say RH will not do this again in the future?

Ericson2314• 5 years ago

I dunno, if wall street had let the bubble burst, and WSB gets scared off with losses, this all could have gone down as "stupid emotional plebs and their tulips". But now that there is definitely lawsuit material, the bigger questions are now firmly part of the narrative and will continue to unfold in the media probably long past the extent of the bubble.

gridder2• 5 years ago

It completely defies the vision and purpose of their company. They should at least change it to Robbing Hood

mxscho• 5 years ago

The people behind RH may come back, but the brand seems to be burned at this point. We're not talking about a non-tangible issue here like Facebook abusing their users' privacy. Customers see their raw money being lost by this service.

yanderekko• 5 years ago

RH most likely made the decision already taking into account the potential costs of making it (including lawsuits and fines by regulators).

Yep. It's very possible that RH just knowingly violated whatever rules/regulations in full expectation that this would still be in their long-run best interest, particularly if they were financially exposed in whatever ways on the shorts that were generating losses. We'll see how this works out for them - they'll take a reputational hit but honestly most people do not have an incentive to leave the platform other than smoldering moral outrage or because they think that GME-like opportunities will continue to present themselves in the future (unlikely imo.)

tarsinge• 5 years ago

The GME move is costing BILLIONS to hedge funds, at that scale I’m sure the costs of a million dollar fine is taken into account.

JumpCrisscross10• 5 years ago

They were screwed if they did and screwed if they didn't.

If they didn't do anything, the precedent of courts and regulators giving retail investors wins because someone's gameified UI induced them to trade would leave them with untold liability. In this branch of reality, they're going to get sued--and deservedly.

ignoramous2• 5 years ago

Like sama so eloquently put it, "fuck robinhood".

https://twitter.com/sama/status/1354842339336835074

betterunix27• 5 years ago

That would be right if we were talking about a trading platform, but what we are actually talking about is a brokerage. A brokerage places orders on trading platforms on behalf of its customers and brokerages can make various rules about the orders they will or will not place. For example, Robinhood has restricted trading of box spreads for quite a while following an incident of attempted fraud on their platform (which was partially their fault to begin with). Brokerages also have leeway to stop potential crimes they observe their customers committing, which is what happened here.

For what it's worth, Robinhood was not the only brokerage that is restricting trading GME. TD Ameritrade, Interactive Brokers, and WeBull also have restrictions in place right now.

ric2b• 5 years ago

At a minimum they should've waited for the market to close before implementing the restriction.

The timing of it makes it unethical.

whoisburbansky• 5 years ago

Do they realistically stand a chance given that what Robinhood did is technically covered by their TOS? Are we finally going to get answers on how legally binding TOSses are?

airstrike• 5 years ago

A TOS doesn't write law

DamnYuppie• 5 years ago

Correct. My very remedial understanding of law is that two parties can't enter into a legal agreement that violates existing laws or statutes.

dalbasal7• 5 years ago

There is no the answer, but we sure might get an answer.

Spivak2• 5 years ago

And the commenters in the thread are claiming that RH is cancelling orders and trying to pretend that the cancellations were user-initiated which I think opens up a whole other bag of worms.

offby37years2• 5 years ago

After eviscerating their most fervent users they are all but ruined either way. Retail is quickly learning the true cost of "commission-free" investing.

f430• 5 years ago

like the saying: If the product is free, YOU are the product.

ta12345678904• 5 years ago

Retail is quickly learning the true cost of "commission-free" investing.

But what is the alternative? Other brokers (eg TD) have done the same as Robinhood. So what is retail to do? It seems like anywhere people would attempt to do something like what’s been going on with GME, would respond in the same way as RH to the pressure of the powers that be.

xirbeosbwo12345• 5 years ago

No and no. They have no case. What Robinhood did is pretty normal. Ignore the ambulance chasers.

totalZero5• 5 years ago

I think the problem for Robinhood here is that their decision has effectively dampened the upward mobility of the stock, which hurts option holders (because IV goes down) and long holders (because the stock can't go up as much).

So in a way, Robinhood is hurting all the people with existing long-delta and long-vega positions. Many of those people are Robinhood's own customers.

I guess Robinhood would have to demonstrate that the position isn't suitable for its customers, or that they couldn't guarantee orderly execution under the stress of a continued barrage of orders and new customer sign-ups.

This limitation definitely has an impact on GME stock, which is not good for RH because their own customers are largely the people who lose.

You can put whatever you want in your TOS, but if you lose money for your own customers and one of your investors (Ken Griffin) is on the other side of the trade, then you have a huge problem on your hands.

antonzabirko2• 5 years ago

Their customers are hedge funds, not retail.

im3w1l• 5 years ago

Good points. Jesus, this is such a mess.

boublepop• 5 years ago

You can’t overrule laws with TOS’s.

OliverGilan3• 5 years ago

A TOS doesn't stand up to law but also it goes beyond that. Even if you don't use Robinhood but you were holding GME you are affected by this move. It's securities fraud and market manipulation at its finest.

paulddraper5• 5 years ago

Robinhood is a brokerage.

Brokerages can't manipulate markets.

It's illegal.

dudul• 5 years ago

A TOS (or any contract, agreement, etc) cannot impose something that goes against the law.

artembugara2• 5 years ago

I believe there will be a big journalist investigation about how some pretty influential investors made Robinhood management do what they did.

Because someone was loosing billions because of it.

toomuchtodo2• 5 years ago

Citadel, who is on the losing side of the short GME trade, is who Robinhood sells order flow to. Make of that what you will.

https://finance.yahoo.com/news/citadel-point72-back-melvin-2... (Citadel, Point72 Back Melvin With $2.75 Billion After Losses)

https://www.cnbc.com/2020/08/13/how-robinhood-makes-money-on...

mywittyname3• 5 years ago

Oof. It looks like a duck, and it is starting to sound like a duck.

I wonder if it's a duck?

luxuryballs• 5 years ago

So all it takes for a sound false flag attack conspiracy theory is for some sweeping legislation and some insight into which specific user accounts started this whole ordeal, not too dissimilar from the Capitol invasion and what has followed so far... heck it already seems clear if something isn’t beneficial for the oligarchy the media would bury it very quickly rather than fluffing it up to high heaven!

rank0• 5 years ago

Where have you read that Citadel has short positions? Buying a portion of Melvin Capital after they suffered big losses is absolutely not the same.

ajliu• 5 years ago

Citadel Securities (the market maker that buys and executes Robinhood's order flow) and Citadel (the investment group) are very different companies, and they have a ton of red tape in place to prevent risk of collusion between the two.

Considering Citadel Securities makes _significantly_ more money than Citadel would stand to lose with its short positions, the thought of the two colluding to pressure Robinhood seems a bit far fetched to me.

dalbasal7• 5 years ago

Hard to investigate winks and nods.

artembugara2• 5 years ago

I'm pretty sure that Boston Globe's "Spotlight" have heard such opinions many times

OliverGilan3• 5 years ago

I want to believe this but by and large it seems the media is unsurprisingly siding with the hedge fund side of things. Mainstream media clearly works for the elites.

_v7gu3• 5 years ago

Always has.

fairity4• 5 years ago

And these "influential investors" also coerced Bank of America/Merrill Edge/the other 5 brokerages into implementing the same trading restrictions?

Or, could it possibly be that these institutions implemented trading restrictions to protect their clients from the impending crash?

lucasverra• 5 years ago

There is one I've seen in twitter, might join that one ?

https://twitter.com/redditinvestors/status/13548442017211965...

ogre_codes9• 5 years ago

There is a fantastic quote in the comments:

> The ones with laughably ironic names. “Robinhood” working for the rich to spite the poor.

I find this whole drama bizarre. I suspect there is going to be a huge pile of shattered portfolios at the end of this mess.

llaolleh• 5 years ago

I agree. The ultimate irony is that their mission is to democratize finance.

ogre_codes9• 5 years ago

The ultimate irony is that their mission is to demon-atize finance.

The above is what I read at first glance which seemed appropriate.

whoknew1122• 5 years ago

Robinhood's mission is to gamify day trading. Don't let the pretty mission statements obfuscate the truth.

Havoc• 5 years ago

Yup. And it’ll be a bunch of people that can’t afford to lose the money

ghaff• 5 years ago

One can simultaneously find this whole thing pretty popcorn-worthy while hoping not too many people end up seriously screwing up their lives over it.

ogre_codes9• 5 years ago

Indeed. Exactly this.

There is a situation where retail investors don't get utterly screwed but that is a fine edge and on either side of it, thousands of them get screwed.

Apocryphon• 5 years ago

Hardly the first time in startup history, sadly.

rvz• 5 years ago

After Melvin Capital loses billions with their naked shorts, Citadel and other hedge funds short selling take over to pulls the strings from underneath some trading apps, including Robinhood.

Will be interesting to see where this lawsuit will go, since it looks like a clear coordinated manipulation of heavily shorted stocks and blocking everyone else from buying them.

Rigged from the beginning. But we'll see what happens with this lawsuit.

I guess someone is only letting the hedge funds trade rather than their own customers. [0]

[0] https://twitter.com/RobinhoodApp/status/712708069369782272

gowld5• 5 years ago

What naked shorts?

Do you have any evidence for these claims?

mmastrac2• 5 years ago

I think the fact that Gamestop is >100% shorted suggests that there is naked short selling happening _somewhere_. Clearly there were shenanigans.

EDIT: apparently multiple lending of shares does happen and Overstock sued over this [1]

[1] https://www.courthousenews.com/overstock-com-settles-short-s...

mox1• 5 years ago

https://www.nyse.com/regulation/threshold-securities

This is a list of stocks that have been sold, but the seller failed to deliver those shares. AKA naked shorting.

GME has been on this list for a month now.

SEC call this "Reg SHO". https://www.sec.gov/investor/pubs/regsho.htm

natrik2• 5 years ago

Citadel, Point72 to Invest $2.75 Billion Into Melvin Capital Management - 3 days ago [0]

[0] https://www.wsj.com/articles/citadel-point72-to-invest-2-75-...

cma• 5 years ago

With Citadel as a large market maker I would think Robinhood likely has a financial conflict of interest with them with respect to their customers, selling Citadel "dumb flow" (and now, depending on how you look at it, lobotomizing the flow).

0x426577617265• 5 years ago

It's probably purely a math question -- what's cheaper impending lawsuit (we can settle) or losing our trade?

Miner49er• 5 years ago

True, there needs to be an SEC investigation and jail time.

Someone1234• 5 years ago

Why are you contrasting those two things? Don't they BOTH get sued AND lose retail trade volume by restricting these tickets?

that_guy_iain• 5 years ago

I would like to think if they lost the lawsuit they would get fined by the SEC of a fine more than what they would have lost. But, it'll probably less so from a maths point of view it's best to break the law.

ipnon• 5 years ago

My theory is that no market makers want to buy the orders Robinhood is selling anymore.

mlindner• 5 years ago

I mean if you have a bunch of really really angry retail shareholders that want literal blood (which many of them sound like they do) then it's not the person being sued that gets to decide to settle.

threatofrain• 5 years ago

https://www.warren.senate.gov/newsroom/press-releases/senato...

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

What about regulations?

ballenf• 5 years ago

If RH signaled to its hedge fund investors that it would be making this change in advance and those funds entered into new short positions with that information, would that open both parties up to additional liability?

jorblumesea• 5 years ago

It's a simple math question. SEC fine will not be close to the billions they stand to lose. Nakedly illegal, and everyone knows it.

gonehome3• 5 years ago

I'm pretty sure you're wrong about this and this isn't 'naked shorting'.

I have pretty low confidence in the detailed specifics here, but I saw some discussion on Twitter that naked shorting being legal could have actually prevented the squeeze we're seeing. [0]

The reason for the extra >100% has to do with how the stock lending works (Matt Levine wrote a bit about this recently). [1] Quoted below.

"This does not necessarily mean a lot of people are doing evil illegal nefarious naked shorting! Really, I promise! There is no special limit on shorting at 100% of shares outstanding! Here is an explanation of how options market makers (discussed below) are allowed to short without a locate, but I want to offer an even simpler explanation. There are 100 shares. A owns 90 of them, B owns 10. A lends her 90 shares to C, who shorts them all to D. Now A owns 90 shares, B owns 10 and D owns 90—there are 100 shares outstanding, but 190 shares show up on ownership lists. (The accounts balance because C owes 90 shares to A, giving C, in a sense, negative 90 shares.) Short interest is 90 shares out of 100 outstanding. Now D lends her 90 shares to E, who shorts them all to F. Now A owns 90, B 10, D 90 and F 90, for a total of 280 shares. Short interest is 180 shares out of 100 outstanding. No problem! No big deal! You can just keep re-borrowing the shares. F can lend them to G! It's fine."

I still think what Robinhood did here is both wrong and a stupidly short-sighted that will damage their brand, but there's so much over confident misinformation about what's happening surrounding this that it makes it harder to understand.

The NYT is no better - another dumb Taylor Lorenz article got less right than most random Twitter threads.

[0] https://twitter.com/simoj_/status/1354664677364609026

[1] https://www.bloomberg.com/news/newsletters/2021-01-25/money-...

kevmo• 5 years ago

It isn't going to just damage their brand -- Robin Hood the blockbuster business is basically over. They will never recover from this.

Amusingly, them blowing up Robin Hood made me put up an order for $GME. If their position is so valuable that Citadel would destroy a business worth billions, then I am convinced this is an amazing speculative play.

djeiasbsbo• 5 years ago

I don't think that Robinhood had any other choice here. Their partner is Citadel, which is basically a "middleman" broker. Citadels main business is this, for every incoming stock purchase, they buy stock at an amount that is just slightly lower, driving up the stock price a tiny bit, and then sell the stock to the buyer, pocketing the difference. They can do this because they have direct access to the stock market and are fully autonated. Robinhoods access to the stock market is also through Citadel. Citadel also bailed out the Melvin Capital hedge fund earlier this week.

I would imagine that Citadel can simply force one of their partners like Robinhood to do anything by threatening to cut them off from the market entirely.

I think their main goal now is to make sure that the lawsuits and fines they will be hit with will cause them to loose less than a short squeeze in this stock would eventually have.

But all of this is just speculation. I don't actually know anything about the stock market, I started reading about it two days ago. I don't want to "conspire" or anything like that, just my theory.

zaroth3• 5 years ago

Obviously it should be illegal to lend the same shares out multiple rounds. If it's not, that's an absurd hole in the regulation.

A owns 90 shares, B owns 10. A lends 90 shares to C who sells them to D. D lends 90 shares to C who sells them to E. E lends 90 shares to C who sells them to F...

C in this hypothetical is borrowing and selling the same shares over and over again to various 3rd parties. Shorting the same shares twice is truly naked short selling.

If there's three people in a room, and only one pair of pants, what would you call it?

gonehome3• 5 years ago

Well the RH decision may have been more reasonable than I thought (and have to do with clearing house details I didn’t understand) - just communicated terribly: https://marginalrevolution.com/marginalrevolution/2021/01/wh...

mrtksn• 5 years ago

I wouldn’t know where it goes legally but what I hope that it leads to the understanding that the stock market is not the economy and even is not a market.

I would love to have a free investment market where the money is made when the companies succeed, not a casino that kicks you out for counting cards.

Geminidog• 5 years ago

When you divvy up shares in an investment to meaningless portions like 0.00001% of a company there's no utility in the investment period.

It then becomes the same thing as buying and selling useless paper. In order to make the system truly a market you have to restrict the size of the portions. Something like 1% is the smallest cut someone can own.

But then that would stop the huge amount of cash companies tend to receive during an IPO thereby restricting the growth of the actual business.

JumpCrisscross10• 5 years ago

Melvin Capital loses billions with their naked shorts, Citadel and other hedge funds short selling

Citadel has no short positions to speak of in GameStop. They bailed out Melvin, which means they made money, not Melvin's positions per se. Also, by the time that happened Melvin had already closed out its short [1].

The conspiracy hypothesis might have legs if Citadel's asset management and market making arms colluded. Absent evidence, however, it's a suspicion at best.

Robinhood is between a rock and a hard place of its own making. Market makers stopped making markets in an increasingly-volatile stock. Robinhood, having relied on market makers for execution, likely has sub-par exchange connections, so their execution quality started degrading.

They're also staring down almost-guaranteed lawsuits regardless of what they do. If they badly execute, lawsuit. When the bubble pops, lawsuit for having been induced to trade through their gameified UI. If they block, lawsuit for interfering with trading.

[1] https://www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddi...

scythe2• 5 years ago

Citadel has no short positions to speak of in GameStop. They bailed out Melvin, which means they made money, not Melvin's positions per se. Also, by the time that happened Melvin had already closed out its short.

You have made these claims dozens of times today without citing sources. Are you spreading insider information, lying, or just incredibly lazy and don't care if people believe you?

eric_b2• 5 years ago

Thank you for being a voice of reason. The speed at which the "wall street cabal is pulling strings and hurting the little guy!" conspiracies erupted was breathtaking.

It's a few short sellers who got wrecked. The rest of the institutional guys are fine and don't care about this except for how much money they're making.

zarkov994• 5 years ago

How come they only had trouble executing buy GME orders? Honestly I hope RH is burned to the ground after giving up whoever coerced them into doing this.

jcranmer• 5 years ago

The thing that confuses me most here is what legal grounds does this proposed suit actually have to stand on? I've not read RH's terms of service, but I'd be surprised if whatever terms it laid out didn't basically have a fuck-you clause in it that would throw out any contract violation suit. Additionally, I'm not sure if there is actually a private cause of action to sue someone for alleged market manipulation (not that I believe the allegations here).

DoctorNick• 5 years ago

The conspiracy hypothesis might have legs if Citadel's asset management and market making arms colluded. Absent evidence, however, it's a suspicion at best.

Yeah, uh, they do that all the fucking time. It's a Soviet fiction that they keep a firewall between those two businesses.

dcolkitt• 5 years ago

I don’t think people really understand how Citadel’s internal structure works. It’s not just one mustache twirling villain, deciding what to do.

The market making unit is in a totally different part of the org chart, with its own PnL lines, than the hedge fund. In fact Citadel Securities is a separate company than Citadel Investments.

But most importantly there’s a legally mandated Chinese firewall between the two. Employees on one side are not allowed to discuss operations with employees on the other. This is enforced to the extent, that an employees access card won’t let them enter the other side of the division.

Citadel makes a shit ton of money as it is. Nobody there is going to risk major jail time with an easy to unravel scheme involving dozens of co-conspirators, just to make a few extra bucks on a tiny short position.

stonogo2• 5 years ago

This is weasel crap, and pretending that separation is meaningful is one of the reasons people hate legalese smoke and mirrors. All it takes is someone near the top of the org to send some messages, and you don't have to be in the same room to do it. The financial world pretends this crap works because otherwise they'd be rightfully pilloried for exactly the kind of shit that is happening right now.

imcoconut• 5 years ago

I don't know for sure but I don't think there needs to be a chinese firewall between the two like at banks. Banks investment banking and advisory divsiions have access to insider information by the nature of their work, which is why the chinese firewall exists between them and the sales and trading desk. Citadel is a hedge fund, however that uses only public information (presumptively, as otherwise would be illegal) so i don't think there's a reason why they would need to be firewalled off. Also Citadel does use Citadel Securities for execution.

Additionally, they're both owned (mostly) by Ken, who is know for being a bit "detailed" (to put it nicely) when it comes to his businesses. He almost certainly has live second by second pnl updates for all parts of all of his business, he almost certainly was the one who made the decision to invest 1.4+ bn into Melvin, and he almost certainly knows that retail flow (esp robhinood) is a huge part of citadel securities business.

Honestly I think reddit has some grounds for a case here, but IANAL.

vmchale• 5 years ago

Citadel and other hedge funds short selling take over to pulls the strings from underneath some trading apps, including Robinhood.

Webull's clearing firm forced their hand.

runawaybottle3• 5 years ago

Robinhood’s user experience is so nice on mobile that I don’t even feel like switching.

Avalaxy• 5 years ago

A nice user interface is of no use if you can't use said user interface to do any actual trades (the whole reason you are with them).

runawaybottle3• 5 years ago

Which makes he hope that RH figures this out and weathers this. That app and user experience is so painless that it would be a shame to let it go to waste.

natrik2• 5 years ago

Absolutely disgusting what Robinhood did.

PR Puff Piece by Robinhood - https://blog.robinhood.com/news/2021/1/28/keeping-customers-...

Keeping people safe from themselves. Stocks where Retail investors are blocked from buying by TD Ameritrade, Robinhood, etc. yet hedge funds and others are free to continue...

Just yesterday Discord bans the WallStreetBets community.

Note: I held a few positions in some of these volatile stocks

paulddraper5• 5 years ago

Our mission at Robinhood is to democratize finance for all.

Sounds great!

Amid significant market volatility, it’s important as ever that we help customers stay informed.

Excellent, thanks for the information.

We fundamentally believe that everyone should have access to financial markets.

so......

we are restricting transactions for certain securities to position closing only

exclusiv2• 5 years ago

Exactly. Trading halted when it was going up. But no problem letting it plummet down to 112 earlier when most could only sell.

ww5202• 5 years ago

Discord has had significant investment from FirstMark Capital, Greenoaks Capital Partners, Index Ventures, IVP, Greylock Partners, Benchmark, Accel, General Catalyst, Ridge Ventures, Spark Capital, and Tencent Holdings. How much you want to bet they also involve with the hedge funds?

threedots• 5 years ago

I can tell you with some confidence that no partner at any of those funds could care less what some public market long/short outfit thinks and vice versa. Both of these groups of people invest money and that's about where the similarity ends.

tiahura2• 5 years ago

Do I have this right?: 1. Robinhood's TOS explicitly gives them the right to do this. 2. Robinhood is free. 3. Any alleged harm could be mitigated by using another service.

And attorneys wonder why we're held in lower regard than used car salesman.

vorpalhex3• 5 years ago

A TOS isn't law. What Robinhood did altered the market price of several major stocks including AMC and BB. They will almost certainly be getting yet another SEC investigation.

Being free doesn't allow you to commit crimes.

gowld5• 5 years ago

WSB altered the market price far more than RH did.

jjtheblunt• 5 years ago

Is a TOS a contract once agreed to?

Cyph0n2• 5 years ago

According to Reddit, several other trading services are also closing access to these stocks. It seems to be a concerted effort.

doublerabbit• 5 years ago

Trader212 in the UK has also suspended AMC and GME stocks.

PartiallyTyped• 5 years ago

It is, citadel appears to be blocking trading with fidelity/robinhood while they are artificially tanking the stock with low volume trading.

rusl1• 5 years ago

Try to use another service: you have to sign up, upload documents, autenticate your identity and wait for your account to be activated. I lost 4 days for this. 4 days in the trading is a tons of time and Game Stop can go from 400 to 200 in the whiletime. This is unfair.

Cyph0n2• 5 years ago

Not to mention the fact that many other trading services are following suit.

gowld5• 5 years ago

Why is your lack of preparation unfair? Melvin isn't using Robinhood to trade, they chose a method that provides more reliable service.

tiahura2• 5 years ago

Since you’ve paid nothing, why does Robinhood owe you anything?

kart23• 5 years ago

1 is right. Read section 16.

https://cdn.robinhood.com/assets/robinhood/legal/Robinhood%2...

warent• 5 years ago

An app called Robinhood, named after the archetype of a man who took from the rich and gave to the poor, now blocking people from taking from the rich. I hope the irony is not lost on the general public. Robinhood needs to rebrand and/or fix their internal mission statement.

undefined1• 5 years ago

Robinhood needs to rebrand

Sheriff of Nottingham™

gridder2• 5 years ago

Robbing Hood

_jal• 5 years ago

Lapdog Capital

malandrew2• 5 years ago

It was a bit more nuanced than taking from the rich to give to the poor. Robin Hood took from the tax collectors and gave the money back to those from whom the tax collectors stole.

snarf21• 5 years ago

This is amusing but to be clear the "poor" they were trying to help was always themselves.

schnable• 5 years ago

Is this right? Most of these people pumping up and holding aren't going to get paid, they are going to lose their money when the stock finally deflates. That would be the same whether they halted trading or not.

Tenoke5• 5 years ago

RH caused a huge price drop in a stock that a lot of their users held. At least some of them would've sold while the price was higher and in the best case for them if the squeeze worked it would've been the short sellers who would've made the losses who are mostly not on RH. This move near-guaranteed it's their users who took the bigger losses, including those that might've sold today anyway.

UK-Al05• 5 years ago

I imagine wsb people expect the stock to rise, when shorters have to buy the overinflated stock to satisfy their obligations.

Wsb people knew this and exploited it, just like a hedge fund could do. However they don't have the political power of a hedge found so are now getting screwed by only being given the ability to sell not buy.

People on wsb knew exactly what they were doing. But we're stopped because some big institutional investors don't like it.

Institutional investors exploit retail investors all the time. They don't like it when it's the other way around.

betterunix27• 5 years ago

Robinhood has always taken from the poor to give to the rich, they just hid it well. Take a closer look at how they are making money when they don't charge any commissions (the "shadow exchange" where HFT operations get to make money on orders placed by Robinhood's customers),

SirLJ• 5 years ago

Just walk away from Robinhood, if you are not happy, close the account and move the money away, this will really heart them...

thebruce87m• 5 years ago

It’s not just them. Trading 212 have pulled the same shenanigans.

tinyhouse4• 5 years ago

Exchanges have breaks in place and can halt trading for certain stocks. I think it made sense to halt trading given what happened yesterday. But it's not Robinhood's job.

the_pwner2244• 5 years ago

That's a very bad analogy. Exchanges can halt trading. They can say: hey, some crazy stuff is going on here, everyone take a 15 minute time out to think about it before you continue.

Robinhood prevented buying. That is very, very different than stopping trading. While Robinhood's action might not legally be 'market manipulation', it certainly does result in the market being manipulated. People who were not using Robinhood would have their PnL significantly affected since a lot of pressure on the stock price was coming from buyers on RH.

cbarill• 5 years ago

To be clear, Robinhood did not "halt trading" on these stocks, they disabled buying while allowing users to still sell shares. This effectively encourages users to sell.

SnowProblem• 5 years ago

That's right. Yet I just listened to CNBC report Robinhood stopped trading on Gamestop to prevent people from selling. An honest mistake I'm sure.

ww5202• 5 years ago

They halted the buying not the selling. That's a clear case of market manipulation.

JamesSwift• 5 years ago

This is _very_ different. They halted _only_ buying, and if I wanted to buy via another brokerage I would need to wait 5 days for funds to clear in Robinhood before I could even withdraw. So they effectively shut off demand but kept supply the same, and there is absolutely no other result that can occur other than the price tanking.

OliverGilan3• 5 years ago

Countless times I've seen users on Hacker News mock DeFi and crypto for recreating the same financial instruments that we already have. I hope today has shown people just how much we need to recreate these instruments (and more) in a decentralized open manner.

the_pwner2244• 5 years ago

That's be great. But unfortunately being decentralized and open will not stop the government regulating it. And the government will (unfairly, as shown by the current situation) regulate it if it gets big enough.

Karunamon3• 5 years ago

They can make their ruling, now let them enforce it.

I don't mean that as some pithy throwaway, I mean that they lack the resource and ability. It is quite possible (and quite easy) to buy and sell crypto without ever getting involved with a KYC privacy invasion. A crypto transaction involves sending a few hundred bytes of data onto a distributed network, and good luck shutting that down.

Keep in mind that governments historically have a poor record of preventing people from sending and receiving data they'd prefer you didn't.

centimeter• 5 years ago

They're going to have a much harder time.

young_unixer• 5 years ago

They've been trying to take down dark net markets for 10 years, spending tons of resources and with limited success.

I'd call that a success for cryptocurrencies. If a portion of that success can be achieved in normal, everyday transactions, then we would be in a much better world than we are today.

hiq4• 5 years ago

Are you saying that there's some blockchain solution to this problem? Because I don't see it. You will not get shares listed on a decentralized system without some entity vouching for them, which remains legally liable.

Zamicol2• 5 years ago

Have you looked at Uniswap?

Zamicol2• 5 years ago

Exactly. Defi couldn't ask for a better case study than wsb.

sgregnt2• 5 years ago

It's not just Robinhood, I'm on Schwab and they blocked the GME stock from teading this morning (probably sell is till open)

themodelplumber2• 5 years ago

I heard this about another brokerage, too... Maybe not such great news for that lawsuit?

sgregnt2• 5 years ago

Not sure about either way. One thing did look interesting to me: the messages when trying to buy/ short the stock on Schwab looked strange. This might be indicative that they did not have a suitable system in place to interfere with the trading so drastically?

Initially it would say the stock ticket is wrong then after trying a few minutes later I trying short selling it would say the margins are not met (however I had more than 1000% margins) and finally it said the trading is restricted because of high volatility.

blululu• 5 years ago

It might help the defense but ultimately the percentage of GameStop’s stock that is traded/held on RobinHood is very high (it is most of the market) and restricting trades on the platform is likely to cause serious losses to their customers. All the ingredients of a securities fraud case are present and the company stands to lose its entire business over the lawsuit.

johnbrodie• 5 years ago

Schwab, TDA, and others restricted trading on margin. A company saying "we won't loan you money to speculate on this volatile stock" is way different than saying "we won't let you trade this stock with your money", IMO.

mutatio• 5 years ago

Trading 212 in the UK has disabled purchases of GME stock. Ironically Trading 212's tagline also includes "democratising" trading.

dv_dt• 5 years ago

I think so too, but as someone not in any sort of GME position, but on TDA (which is being acquired by Schwab anyway), this is a good reason for me to accelerate my search to move off the platform to a more retail friendly brokerage.

Tenoke5• 5 years ago

According to reddit there were issues and people couldn't buy for a while or on the first try but after waiting and multiple attempts were able to.

https://www.reddit.com/r/wallstreetbets/comments/l6wrig/you_...

kevinventullo• 5 years ago

I just tried on Schwab and it doesn’t look like I’m blocked.

austincheney• 5 years ago

It looks like everything is still available on Fidelity.

hinkley2• 5 years ago

I put up a small limit order on ETrade this morning for schnitzengiggles and it accepted it and then executed it.

artificialLimbs• 5 years ago

M1 blocking now too.

dang2• 5 years ago

We detached this subthread from https://news.ycombinator.com/item?id=25945839.

brainsalad9• 5 years ago

Me too. Couldn’t make any trades, nor sell off my position as trading continued elsewhere and was dropping precipitously. I ended up selling off at $132 and lost 7k from a 10k investment just before the end of trading last night.

duxup2• 5 years ago

I'm highly skeptical of the whole Gamestop saga and populist fever surrounding it.

Having said all that...

I don't think a trading platform allowing you to buy / sell stocks should be able to arbitrary decide when you can buy and sell without some reasonable reason that applies to everyone.

elindbe32• 5 years ago

And "applies to everyone" should mean "applies to the entire market for GME". If you halt trading, you halt it for everyone.

duxup2• 5 years ago

Agreed, outside of account specific issues (account hacked concernens, etc).

safog2• 5 years ago

I was just sort of following the whole circus without any interest (maybe a slight short interest even) and even I'm really angry at how this has been done.

Absolutely disgusting, people need to go to jail for this, you can't get away with punitive fines that are less than what the hedge funds would've lost on the trade itself.

I hope regulators step in and preserve all correspondence + records on why this decision was made. But somehow, I don't think this will happen. They will lose documents, texts and chats mysteriously and that will be that.

Only hope is whistleblowers leaking stuff to the media.

fortran77• 5 years ago

I'm friends with a lawyer who says we have a good case for a class action lawsuit.

There's a huge chasm between "I'm friends with a lawyer" and "we are preparing a class action suit."

2bitencryption• 5 years ago

I clicked the link, but I see no evidence of an actual lawsuit being filed?

Instead I see a meme forum that glorifies poor decision making, with a post saying "My friend is a lawyer and she says we have a good case?"

Don't get me wrong, I've got my popcorn ready to go on this. But I thought from the title this would be a mod-post with actual details for a real lawsuit, not just some guy saying what people want to hear.

aryamaan• 5 years ago

Not sure if this is legit: https://www.courtlistener.com/recap/gov.uscourts.nysd.553175...

aynyc• 5 years ago

https://www.courtlistener.com/recap/gov.uscourts.nysd.553175...

SirLuxuryYacht• 5 years ago

My only question is how this will be viable since the RH user agreement states:

>"I understand that Robinhood may at any time, at its sole discretion and without prior notice to Me: (i)prohibit or restrict My access to the use of the App or the Website or related services and My ability to trade, (ii) refuse to accept any of My transactions, (iii) refuse to execute any of My transactions, or (iv)terminate My Account. "

[0] https://cdn.robinhood.com/assets/robinhood/legal/RHF-RHS%20U...

scythe2• 5 years ago

Those sections seem to deal with actions taken against an individual user, not actions that affect a stock's price. In theory if Robinhood's actions are illegal (don't know) and if they caused losses to holders of GME (don't know, but likely) then plaintiffs could include people who don't even have Robinhood accounts and never agreed to that.

pnt12• 5 years ago

My understanding is Terms of Service have little significance in courts: whatever a company writes in its ToS, it must still comply with the laws.

Facebook banning you due to some vague ToS? No problem, your access to Facebook isn't protected by law. An app which can affect your investments and finances? I don't know if I'm this case it's legal or no, but that's a whole different level.

mmcwilliams• 5 years ago

I think more to the point would be the arbitration agreement in section 38. Not condoning the behavior but it seems that kind of agreement might limit a class action suit.

tinyhouse4• 5 years ago

I wonder what all of this means to Robinhood's planned IPO.

CobrastanJorji2• 5 years ago

If I had to guess, I'd say it's a net positive. Robinhood is now all over the press at the cost of a lawsuit from a bunch of Redditors who allege Robinhood can manipulate the stock market.

tinyhouse4• 5 years ago

Not sure I agree. The attention their shady business model is getting now is not something they would've liked. I'm also not sure what it means to their user growth. One one hand they are getting a lot of press which can help them gain more users. On the other hand, the press they are getting is not positive and their app ratings are going down (Google/Apple would likely give them some protection but they cannot block negative ratings forever). If many traders start migrating to other trading solutions it can have a snowball effect.

Tenoke5• 5 years ago

Is there a complete list of all brokers which stopped offering GME?

I see reports all over the place but it's hard to track whether some just blocked options or on the margin, which reports are true etc.

Edit: Best Ive found so far https://www.reddit.com/r/wallstreetbets/comments/l72tfu/robi...

second--shift• 5 years ago

It'll be all brokers who use Citadel for liquidity - I'm blocked on several major brand-name brokerages. I don't have a position in GME, but i can only route "closing" orders - no opens.

jariel• 5 years ago

If a Mall is rushed with 25 000 people in a day, you can be assured they will want to close the doors until the mob dissipates.

The store owners, generally in favour of large crowds, are likely to agree because they don't want to be mobbed either.

None of the companies involved here want their stocks to go on crazy volatile ride, it benefits almost nobody.

People are conspiratorial about evil bankers pulling strings to stop this when basically everyone wants it to stop.

Why do these people stampeding through the market thing that they are helping? It's very likely that the companies on the receiving end of this volatility want nothing to do with it.

fairity4• 5 years ago

Most people claiming that Citadel is pulling the strings seems to be missing the following facts:

- Robinhood was one of many brokerages to implement trading restrictions. e.g. Bank of America/Merrill Edge also shut down buy orders for GME. Citadel does not have the same relationship with these other brokerages. So, to say Robinhood made their decision based on a conflict of interest doesn't hold water.

- Just because Citadel accounts for $xx million of Robinhood revenue, doesn't mean Robinhood stands to lose $xx million if they piss off Citadel. There are plenty of other market makers willing to fulfill Robinhood's orders. Presumably these other market makers would pay slightly less than Citadel, but Robinhood would only stand to lose some small percentage of $xx million.

Putting yourself in Robinhood's shoes, it makes little financial sense to comply with Citadel's demands even if Citadel attempted to coerce them into implementing these trade restrictions.

dalbasal7• 5 years ago

It's always true that the assumed conversations in smokey rooms are inaccurately reported. So sure, nothing about Citadel's role in this story is actually known.

OTOH, in this case, it's genuinely hard to conceive of an alternative story that isn't a cabal story.

Also, in practical terms... most of the action was on robin hood. If other brokers/originators/banks didn't shut down buys then this entire wallstreetbets craziness would flood in their direction.

Q: Did BoM & Merrill Edge shut down trading on #wallstreetbetmadness stocks entirely, or just the buy side? One of the most damning things here is that robinhood only shut down buys. Seems like blatant market manipulation, but I don't really know the rules.

reducesuffering2• 5 years ago

Genuinely hard

Actually incredibly easy. $GME isn't worth anywhere near $350 or $20B market cap. These people are in a world of hurt when you have WSB spinning stories and encouraging reckless behavior, where some are throwing their last $20,000 into it, which will eventually disappear to $100 unless they passed the buck to some other chump before it all blows up. RH could genuinely believe that the sooner the GME pump stops, the less damage is done to these extremely naive retail investors, because the future naive bagholders flooding in are prevented from throwing their little savings at it.

Brokerage execution halting or not, this story has an incredibly obvious ending, and it's that some WSB pumpers will profit huge, some hedge funds will lose huge, but the majority of WSB will lose immensely.

matttb• 5 years ago

Robinhood was one of many brokerages to implement trading restrictions. e.g. Bank of America/Merrill Edge also shut down buy orders for GME. Citadel does not have the same relationship with these other brokerages. So, to say Robinhood made their decision based on a conflict of interest doesn't hold water.

My issue is those brokerages said they were closing orders because of Apex clearing. Robinhood basically said that they chose to do it themselves: https://blog.robinhood.com/news/2021/1/28/keeping-customers-...

wadefletch• 5 years ago

1. How likely is it BofA-ML has short positions or investments in funds who do?

2. Isn't Citadel's deal with Robinhood dependent on the flow being "dumb" and not having any broad effect on the market? That's obviously no longer the case, if it ever was. Robinhood is still venture backed, so they're feeling the pressure to show growth in users and profits. Is it possible the market for their "much-less-dumb-than-previously-thought" flow has shrunk substantially?

Also, the retail traders involved and the press surrounding them have (accurately imo) painted this as a populist "sticking it to the elites" movement. What if the so-called elites really do want to disenfranchise and mitigate retail investors impact on the market? BofA, Citadel, and peers might have an interest in maintaining the status quo.

e15ctr0n• 5 years ago

Bank of America/Merrill Edge also shut down buy orders for GME.

I heard that Bank of America/Merrill Edge was requiring posting a 100% margin as collateral if wanting to buy GME options. I didn't hear that they shut down buy orders for GME stock.

ibraheemdev• 5 years ago

Don't call yourself Robin Hood if you are going to turn your back on the folks in Sherwood forest after one phone call from the Sheriff of Nottingham

https://mobile.twitter.com/cvpayne/status/135482042821721293...

yongjik2• 5 years ago

Let me see if I understood it correctly:

(1) If you're buying GME today, there's good (~50%?) chance you'll lose most of your money in two weeks. (Of course there's also a decent chance that you'll make out like a bandit, but I'm not worried about that.)

(2) Moreover, if you're buying GME today, there's a very good chance that you're utterly convinced that you'll make a lot of money.

(3) So, in two weeks, with high probability, these people will flood Robinhood's customer support, and something tells me that they won't take "What do you mean? You made your trade entirely on your own, and nobody can guarantee future prices!" as an answer. (Supporting evidence: see today's talk of lawsuit.)

So, given all this, Robinhood is just limiting the amount of headache it'll face when the shit eventually hits the fan. Sound like good business decision to me.

totalZero5• 5 years ago

This is the "regular people are too dumb to play with the big-boy risk" approach to market access.

It seems classist and doesn't really line up with my concept of the free market.

yongjik2• 5 years ago

Regular people are too dumb to play with big risk, including you and me. There's a reason why most countries have a very tight control of gambling places, and that's not because they're classists. When gambling is allowed, the whole society suffers, because there will be a few lucky winners and many who just lost their life savings, and they still have to eat (and their families have to eat) so someone's tax payment is going to pay for them.

I agree that it's a problem when "too big to fail" players get away with their shenanigans, but that's a separate problem, and you don't solve that problem by encouraging common folks to gamble away their wealth.

bendauphinee• 5 years ago

It seems like a fair chuck of the WSB folks know they are possibly going to lose money here, but they don’t care as long as they can help screw the hedge funds.

https://www.reddit.com/r/wallstreetbets/comments/l6omry/an_o...

Oblouk2• 5 years ago

You seem to be making a lot of flawed assumptions here.

Even IF you are to assume this is a simply speculative "greater fool" scenario Robinhood just ensured through their interference that the last buyers are less likely to profit.

Robinhood's job is not to police transactions it is to process them. That they would do this for a few million $ in potential customer support time is so naïve.

Letting them off the hook for illegal manipulation because "it is a headache" is one of the stupidest arguments I have heard.

Sebb7672• 5 years ago

So, in two weeks, with high probability, these people will flood Robinhood's customer support

Robin Hood is a brokerage. It is totally normal for them to have clients which (unwillingly or, in this case, willingly) have lost money - their customer support should handle this just fine. A lawsuit for allowing normal trading is going to be laughed out of court; this, on the other hand, will not be good for them, no matter how the lawsuit turns out. Not to mention that the SEC will take a nice long look at what happened here.

If customer support overhead would be their actual worry, they could've simply implemented a large checkbox saying "THIS STOCK IS HIGHLY VOLATILE. YOU _WILL_ MOST LIKELY LOOSE YOUR MONEY. Continue at your VERY OWN risk" and be done with it (you might argue this is still somewhat manipulation, but that could've easily been done in good faith).

hehehaha• 5 years ago

As a Robinhood customer, please leave Robinhood. Please. I am so tired of dealing with r/wsb complaining about RH. They give you zero commish options. What more do you want?

ignoramous2• 5 years ago

Like Sama so eloquently put it, "fuck robinhood".

https://twitter.com/sama/status/1354842339336835074

betterunix27• 5 years ago

Good luck with that, I'm sure the courts will be sympathetic when you come in with the "we were trying to manipulate the price of the stock, but then this brokerage, and a half dozen others, stopped us and we lost money!" argument.

sitzkrieg• 5 years ago

these people are cruising for a rude awakening in electronic trading risk agreements (or similarly worded agreements at signup)

eric_b2• 5 years ago

Robinhood is easily the worst "broker" app I've ever seen. This is just the most public screwup in their long history of anti-user behavior. Why anyone continues to use RH I have no idea.

The only other brokers where I've seen restrictions were against margin trading (which I think is fair and makes sense - gamble with your own money if you want, but not with ours).

Maybe there are some other brokers behaving just as badly, but if the net consequence of this is that RH goes away, I don't think much of value was lost.

shockabilly• 5 years ago

Hey i had 1k buy order on amc and game stop.

I did not authorize a cancel order.

I am not associated with any formal organization and i am an independent investor

alexggordon• 5 years ago

At least one lawsuit has already been filed[0] with most likely more coming. I really don't see how Robin Hood can spin this in their favor, or recover from this from a PR standpoint.

[0] https://www.courtlistener.com/recap/gov.uscourts.nysd.553175...

zander312• 5 years ago

Robinhood is automatically selling users shares https://twitter.com/555Sunny/status/1354854993946406917?s=20

soheil• 5 years ago

I don't think it's only Robinhood, I see other brokers blocking those stocks [0], not sure if it's fair to pile on just Robinhood.

[0] https://twitter.com/convalytics/status/1354859301924438021

snowwolf2• 5 years ago

Can anyone explain why Robinhood don’t appear to have an anti class action clause in their terms?

E.g. like this one https://about.ads.microsoft.com/en-us/resources/policies/cla...

dj_mc_merlin3• 5 years ago

The policy you're quoting is between Microsoft and a business wishing to advertise on it's platform. It is understood that business do read the TOS and contracts of the platforms they sign up with. Users do not. It is still a legal grey area, but more than likely a "no class action lawsuit" clause would be as useful as a paper shield in court.

snowwolf2• 5 years ago

I just chose a random big user facing site and it has similar anti class action terms

https://www.uber.com/legal/en/document/?name=general-terms-o...

McDyver• 5 years ago

Seems like one was filed already:

https://mobile.twitter.com/LJMoynihan/status/135483683016900...

kosh2• 5 years ago

Many things affect the price. Like Elon musk tweeting. Or good sales numbers.

boatsie• 5 years ago

Google, Facebook, Twitter, Amazon, PayPal, etc can fully close your account for “reasons” and people get outraged but there ends up being no consequences. Unfortunately I see the same happening here. It is sad but true.

ketzo• 5 years ago

Hard for me to think of a time when one of those services stopped all of their users from taking an action fundamental to the service. Particularly an action regulated by securities law.

m1117• 5 years ago

They'll be like: "Technical issue..."

hi7509• 5 years ago

cool

bsd44• 5 years ago

Oh I hope they win!

dang2• 5 years ago

For pointers to other vertices of this story graph, see https://news.ycombinator.com/item?id=25933543.

As for this thread, it's got hundreds of comments. If you want to see them all you'll need to click through the More links at the bottom, or like this:

https://news.ycombinator.com/item?id=25945447&p=2

https://news.ycombinator.com/item?id=25945447&p=3

ffggvv• 5 years ago

what happened to all the people who supported banning trump?

“they’re a private company they can do whatever they want”

but now they want protection of users rights

knapi0072• 5 years ago

I want in the lawsuit for blocking the ability to purchase stock. This is not fair to small investors that may want a long position.

knapi0072• 5 years ago

I want in the lawsuit. Why can they restrict buy orders for one class of investors while others are not.

jacksonPQ• 5 years ago

As a long term shareholder of one of the restricted trade companies, my opinion is that all shareholders of these companies, including the companies themselves, were financially harmed by restricting trade by a subset of investors. As soon as trading was restricted, the prices dropped, denying me the right to sell my shares at a fair market value.

Robinhood customers are a small percentage of the shareholders truly harmed by these actions.

walleyejimbo• 5 years ago

Yes i would love to get on board with this lawsuit for restricting my purchase of 1,500.00 woth of AMC at my order time of the opening bell 26th was 4.83 closing Friday at 13.33 would of had 310.55 shares at a difference of 8.50 @ share comes to lose of profit of 2,640.00 $ plus i tried to put an order in for 1k after they refused my 1,500.00 order and they are trying to say I""I"" cancelled that order that is false!! Contact info 765 586 3156 or walleyejimbo1966@ gmail.com thank you for ur time any kind of response would be great thank you and God bless James M.Legere

Mymartini4• 5 years ago

We need to get everyone to pull funds (minus GME etc) from RH

They won’t have enough $ to cover that & cover the naked shorts they have lent out. Then we sue Citadel who we didn’t sign any contract w

Mymartini4• 5 years ago

If we pull from RH they cannot cover that while also covering the naked shorts they lentto these funds.

Then we sue Citadel & anyone else who was buying in bulk while we could ONLY sell. That is the crime.

jimmydiricci• 5 years ago

Robinhood is holding almost 1,000$ hostage right now.. since the whole GameStop and dogecoin thing I made a decent amount on dogecoin and not only did the site not let me sell off my doge when it peaked not until I crashed to about 6cent was I able to sell but since then they have disabled my account from making withdrawals and haven’t responded to any of my emails. For almost a week I haven’t had access to my funds and been restricted from making trades.. I just want my money back so I can pay my bills and I’ll never use that app again.. horrible company

Michael84• 5 years ago

How do I join? I was not a robinhood client but their clear manipulation of the stock prices caused my positions to be obliterated.

We Are Preparing a Class Action Lawsuit Against Robinhood

Related Stories