Robinhood and TD Ameritrade restrict trading in GameStop and AMC shares

GameStop’s action continued to make big moves, breaking through $ 400 per share on Thursday, powered by Reddit users taking on Wall Street. But investors seeking to make transactions faced several issues on their investment of sites and applications in recent days, with numerous service disruptions, according to Bloomberg. The binge on the stock GameStop led TD Ameritrade and the Robinhood to restrict new purchases of particular stocks (GameStop, AMC and others). This also caused a subreddit to become private and a Discord server must be stopped for violating the terms of use.

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On Thursday morning, Twitter users began posting screenshots of their Robinhood apps that showed a message appended to the stocks of GameStop, AMC, Nokia and Bed, Bath and Beyond: “This stock is not supported on Robinhood.”

Robinhood said in a blog post on Thursday morning, just before the stock exchanges opened: “In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK.”

In a tweet, the @wsbmod Twitter account (which is tied to the Wall Street Bets subreddit community driving recent trades), said: “Individual investors are being stripped of their ability to trade on [the Robinhood app]. During this time, hedge funds and institutional investors can continue to trade normally. “

US Representative Rashida Tlaib, a Democrat from Michigan, responded to Robinhood’s decision, calling on the House Committee on Financial Services to hold a hearing on the actions of the Trade Department, calling them “market manipulation.”

An image circulating on social media on Wednesday just after noon (ET) showed an apparent warning from TD Ameritrade saying it was placing restrictions on stock trading for GameStop, AMC and others. The brokerage firm confirmed the restrictions, saying it had made the decisions “out of prudence in an unprecedented market environment and other factors.”

“In the interest of mitigating the risks to our business and our clients, we have put in place several restrictions on certain transactions in $ GME [GameStop], $ AMC [AMC Theaters] and other titles, ”reads the TD Ameritrade post.

A TD Ameritrade spokesperson said the restrictions imposed include increasing requirements to borrow money for stocks known as margin and limit transactions such as short sales.

“It is not uncommon for us to make such decisions, which we consider on an individual basis, in the interest of mitigating risk,” the spokesperson said via email on Wednesday. “We have been adjusting our requirements for several days as we continue to see trends indicating unusual volume in an unprecedented market environment, which appears to be separate from traditional market fundamentals. We have made decisions that we believe are prudent and appropriate to place certain limits on certain transactions for certain securities. “

The fervor generated by stock trading has not gone unnoticed. Nasdaq CEO Adena Friedman told CNBC on Wednesday that if there was any market manipulation going on, it could halt trading for a stock to investigate. AMC is listed on the Nasdaq, while GameStop is listed on the New York Stock Exchange.

William Galvin, Secretary of the Commonwealth of Massachusetts, told Barron on Wednesday that he thinks the New York Stock Exchange should “consider just suspending it for a month and stopping trading.”

The Securities and Exchanges Commission, which oversees the stock markets, told the New York Times that it was monitoring “Internet discussion forums for signs of potential market manipulation.”

“We are aware of and actively monitor the continued volatility of the options and equity markets, and in line with our mission to protect investors and maintain fair, orderly and efficient markets,” the agency said in a declaration Wednesday. “We are working with our fellow regulators to assess the situation and review the activities of regulated entities, financial intermediaries and other market participants.”

Even the White House “is monitoring the situation,” press secretary Jen Psaki said on Wednesday.

Clarification: This story first distorted the actions taken by TD Ameritrade. The company has some restrictions in place for GameStop and AMC actions, but has not banned them.