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by njovin 1323 days ago
I closed my account with them during the GameStop debacle and never looked back. I wasn't trading GME but was appalled at their reaction.
2 comments

I don't think Robinhood had any choice there. Trades don't settle instantly. Robinhood needs to post collateral with the Depository Trust & Clearing Corporation while settlement is pending, and the required collateral goes up with volatility. During the "GameStop debacle" they had to raise billions of USD in additional capital for this purpose, so no wonder they had to hit the brakes.
They could have frozen trades in both directions.
Blocking selling is a good way to get sued, so brokerages are very hesitant to do it. If the price drops the trader can claim they wanted to sell and are owed the difference. Blocking buying doesn’t have this issue since you can’t sue for theoretical gains.
I think you still can? But yeah probably much harder in court.
They could have... prevented users from exiting their positions? How would that be better?
In the context of what was happening in the market (the "short squeeze" that may or may not have ever happened), allowing sells but not buys clearly biased one position, could be seen as interference.
what exactly were you appalled at?
Not parent, but I assume it's something in relation to https://www.cnbc.com/2021/06/30/robinhood-to-pay-70-million-...
This fine has nothing to do with the GameStop debacle.
They effectively told their users "you're being children, we know better than you".