Kristina Partsinevelos of FOX Business on the collective action brought against Robinhood after restricting trade and the latest news on GameStop.
Small peaceful protests have formed outside Robinhood’s headquarters in Menlo Park, California, the Securities and Exchange Commission headquarters in Washington, DC, and the New York Stock Exchange on Thursday after a call made at a now deleted post on the speculative investment sub-Reddit forum WallStreetBets.
“I WILL PROTEST PERSONALLY IN WASHINGTON,” wrote the user. “These are peaceful protests! Bring your banners and manners! USE MASKS AND KEEP THE DISTANCE. WITHOUT VIOLENCE, WITHDRAWAL OR VANDALISM.”
The move comes in response to the investment platform’s decision to restrict the trading of shares in GameStop, AMC Entertainment Holdings, American Airlines, Bed Bath & Beyond, BlackBerry Limited, Express Inc., Koss Corp., Nokia Corp., Naked Brands Group , Tootise Roll and Trivago.
Robinhood’s decision came after a group of Reddit users came together to buy GameStop’s buying options earlier this week, causing the struggling retailer’s stock to rise to unprecedented levels and hurting short sellers in the market .
Market fluctuations spurred by GameStop’s actions led TD Ameritrade and Charles Schwab’s mobile apps to disrupt during Wednesday’s trading session in response to “unprecedented volumes” and caught the attention of the White House, Treasury and SEC , who announced that they would be monitoring the situation.
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Robinhood user Jenna Fishbine told FOX Business that she got involved in the protest because “Wall Street made the biggest bet that ever happened in our country’s history and they lost the bet.”
“Instead of paying us what was missing, they closed everything up and took our money,” added Fishbine. “This is not fair, so people are protesting.”
Fishbine criticized Wall Street for being hypocritical after amateur investors “discovered his algorithm and won his bet” and called for short selling to be considered an illegal activity, echoing a call previously made by Tesla CEO Elon Musk.
However, the online anger over Robinhood did not seem to materialize in a big turnout. According to information, about 10 people gathered in front of Robinhood’s HQ.
Meanwhile, a few dozen people were also seen gathering outside the New York Stock Exchange, where protesters shouted “Robinhood has to go” and “we want a free market”.
In addition, a single protester was seen outside the Securities and Exchange Commission headquarters.
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Robinhood co-founder Vladimir Tenev said in a tweet that started on Friday that Robinhood will allow limited purchases of restricted titles, noting that the platform will monitor the situation and make necessary adjustments.
Tenev also explained the reasoning behind Robinhood’s decision, noting that the company has “net capital obligations and clearinghouse deposits” with the SEC, which fluctuate based on market volatility.
“These requirements exist to protect investors and the markets and we have taken on our responsibilities to fulfill them seriously, including through the measures we take today,” said Tenev. “To be clear, this decision was not made based on the direction of any market maker we target or other market participants.”
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In addition to protests, two lawsuits were filed against Robinhood. The first lawsuit filed in the Southern District Court of New York alleges that Robinhood “purposely, voluntarily and knowingly” restricted certain securities transactions, including GameStop. The other filed with the Northern Illinois District Court alleges that the app manipulated its platform.
“Robinhood’s mission is to ‘democratize finance for all’. They failed, “said Alexander Cabeceiras, a lawyer for the Derek Smith Law Group who represents plaintiff Brendan Nelson in the New York lawsuit, in a statement to FOX Business.
Congressman Alexandria Ocasio-Cortez, DN.Y., also called the Chamber’s Financial Services Committee to launch an investigation into Robinhood and other brokers because of restrictions on stock trading.
Audrey Conklin of Fox Business contributed to this report