Photographer: Gabby Jones / Bloomberg
Photographer: Gabby Jones / Bloomberg
Robinhood Markets Inc. reduced the number of companies with trade restrictions from 50 to eight, before Monday’s trading session, according to an update on its on the Internet network.
The current list includes GameStop Corp., AMC Entertainment Holdings Inc., BlackBerry Ltd., Express Inc., Genius Brands International Inc., Koss Corp., Naked Brand Group Ltd. and Nokia Oyj.
The opening of new positions in these securities is limited, according to the Robinhood website, which listed the maximum number of shares and option contracts that each user can hold. For those whose current positions already exceed the limits, their positions will not be sold or closed.
Robinhood put purchase restrictions in place after his clearinghouse share deposit requirements increased last week, the company said in a blog on Friday. “It wasn’t because we wanted to stop people from buying these shares,” said Robinhood.
The trading app, popular with retail investors that fueled GameStop’s stock increase, has been under fire across the political spectrum for its decision to restrict trading in high-risk stocks that increased after being posted on social media.
Senator Elizabeth Warren on Sunday called for a broader review by the United States Securities and Exchange Commission on recent trade swings and said that a broker like Robinhood, which invites many individual investors, needs to trade “under some basic rules”.
Robinhood’s commercial restrictions are not illegal: Fmr. SEC Board (Video)
“You can’t do that in the middle of a business cycle,” said Warren of Robinhood’s trade limits on CNN’s “State of the Union.” “It’s not about protecting people from doing bad business. It is about maintaining the level of play. “
A Robinhood representative declined to comment beyond updating the site.
Various processes were moved against Robinhood, alleging mainly restrictions on the part of the trading platform that represented a breach of contract. Still, investors who sued online brokers on the grounds that they were unfairly prevented from trading in stocks may have a long wait before their cases are resolved.
– With the help of Annie Massa and Meghan Genovese
(More detailed updates throughout)