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By restricting trading, he was able to reduce the cash cushion, or margin, that he was required to keep by his clearing house. The company relaxed some of those restrictions on Friday, and on Monday the number of companies with trade restrictions dropped from 50 to eight.
Robinhood’s trading limits sparked a furious outcry among small investors, who claimed that the very app that democratized trading was now making the Wall Street offer.
And the news that Robinhood had raised $ 2.4 billion to help ease trade restrictions did not impress William Moyer of North Carolina. “They’re just the ones trying to cover their butt,” he says. “They realized last week that they made a big mistake, and now they’re trying to make amends by saying that they have the money out there to be able to do all of these trades now.
Mr Moyer, a 26-year-old auto service consultant who had bought shares of GameStop, Nokia, AMC and BlackBerry over the past two weeks, said he was offended by Robinhood’s decision to restrict trading on the platform. form. “I must have suffered in 2008 with my family,” he said, referring to the 2008 financial crisis. “I feel like it’s just another way for the big banks to show that they are in control of everything we do, ”he said. “They are just trying to stop us from growing our wealth as individuals.”
Robinhood’s decision to restrict stock trading has also caught the attention of lawmakers from all ends of the political spectrum. Representative Alexandria Ocasio-Cortez, Democrat of New York, called that “unacceptable.” Texas Republican Senator Ted Cruz retweeted it in agreement.
Lawmakers expect to hold hearings to examine Robinhood’s role in market swings in January.
“I want to make sure we understand what happened there,” Sen. Pat Toomey of Pennsylvania, the new senior Republican on the Senate Banking Committee, said in an appearance Monday morning on CNBC at About the decision to restrict trade.
Representative Maxine Waters, Democrat of California, chair of the House Financial Services Committee, said last week she would hold a hearing on short selling as well as “online trading platforms” and “gamification. “. On Monday, the committee announced that it would hold a hearing on the GameStop issue on February 18.
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