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Sure. Robinhood got a call from someone very powerful in their circle, politely asking them to stop the amateur plebes from interfering with their professional
by zarkov99 6y ago
Sure. Robinhood got a call from someone very powerful in their circle, politely asking them to stop the amateur plebes from interfering with their professional market manipulation. We are taking about people commanding titanic amounts of capital and (indirect) regulatory power. Robinhood then had the choice, do we make enemies out of these people or do we just screw, er, I mean protect, our customers? Unburdened by a moral compass or fear of retribution, the RH leadership made the obvious choice.
- vlkr 6y agoSource?
- zarkov99 6y agoIf I had a source I would be reporting it to the SEC, the FBI and any newspaper that would print it, though of course that would likely be none. This is all speculation, obviously.
- pfortuny 6y ago“You know: we can buy market information elsewhere”. This is not a source but. The problem with huge power is that one loses control of the size of one’s decisions.
- honest_guy 6y agoLol
- itsyaboi 6y agoHackernews, everyone!
- dang 6y agoPlease also don't post unsubstantive comments here. We're trying for something a bit different than internet default. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html https://hn.algolia.com/?dateRange=all&page=0&prefix=false&sort=byDate&type=comment&query=stave%20by:dang https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...
- dang 6y agoPlease don't post unsubstantive comments here. We're trying for something a bit different than internet default. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html https://hn.algolia.com/?dateRange=all&page=0&prefix=false&sort=byDate&type=comment&query=stave%20by:dang https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...
- benmanns 6y agohttps://cdn.robinhood.com/assets/robinhood/legal/RHS%20SEC%20Rule%20606a%20and%20607%20Disclosure%20Report%20Q3%202020.pdf https://cdn.robinhood.com/assets/robinhood/legal/RHS%20SEC%2...
- vergessenmir 6y agoThis is so true. It's all connected. It's probable that Reddit, Discord, RobinHood have all received calls to disrupt retail traders from political players or financial backers. There's no evidence of this, the truth is we'll never know, but how its most obvious reason. If only RobinHood would live up to its namesake. It is alarming that "soft" circuit breakers are being used to target retail traders on exchanges. <rant> I rarely emote but this stinks to high heaven, corporates and politicians doing anything to keep necks under boots.As upsetting as it is to see folk fighting back capped at their knees, the broader issue is that of censorship, of the soft or hard variety, and coordination across firms to limit movements. </rant>
- josho 6y agoI look forward to the investigations on market manipulation that RH, Schwann, and TD did by not allowing their customers to trade on that stock. Or is it normal for brokers to independently halt trades on stocks they deem too risky?
- shakezula 6y agoIdk if it is or not but it feels like crazy levels of illegal to be able to just halt buy orders like that. Imagine the inverse, if they just halted sell orders on a stock they were deeply invested?
- inlined 6y agoIf not criminal it sounds like a class action lawsuit.
- shakezula 6y agoOthers in this thread are pointing out issues with arbitration, which really muddies the water on how this can be handled. Definitely complaining to the SEC though. Imagine if they did the inverse of this, and stopped anyone from being able to sell a stock they were heavily invested in. That would be absolute madness. It’s the exact same ass-covering.
- herewegoagain2 6y agoWhat would "they" do if they were enemies of Robin Hood? Short Robin Hood stock? Or send contract killers?
- TeMPOraL 6y agoIf by "they" you mean Wall Street - pull the data sharing contracts that underpin Robin Hood's business model in the first place. If by "they" you mean WSB - for now, they just nuked RH's app in Play Store, but they're already calling for a class action lawsuit.
- Scoundreller 6y agoDon’t just pull RH’s, pull all brokers’. Paying a commission doesn’t protect you from anyone maximizing profits. All the discount brokers sell order flow. > Schwab earned 1.4% of revenue from payment for order flow, TD Ameritrade about 8.4%, and ETRADE about 6.1%. They all make half or a lot less of their revenue from commissions. > The contribution to revenue across the discount brokerages is minimal: 6.8% at Schwab, 28% at TD Ameritrade, and 17% at ETRADE. > Interactive Brokers is the one standout, largely because it caters to high-volume professional and semi-professional traders; it makes 49% of revenues on commissions. All RH did was run a tight ship on costs and cut commissions to zero. In theory, commissions could go less than zero. https://www.kalzumeus.com/2019/6/26/how-brokerages-make-money/ https://www.kalzumeus.com/2019/6/26/how-brokerages-make-mone...
- joering2 6y agoNow they made enemies of most of their clients. I bet not more than few weeks before you will see advertising from big shot lawyers on national TV welcoming you into class action lawsuits. Frankly, I am terribly disgusted by this news from Robinhood and I hope they will be sued into eternity... and then hopefully DOJ step in an see what they did was illegal. If you have Robinhood account, write you state AG. Show your outrage in writing so they can also get involved.
- techsupporter 6y ago> you will see advertising from big shot lawyers on national TV welcoming you into class action lawsuits Like all darling start-ups, Robinhood has a section of its terms of use whereby users give up their right to sue. Because courts are only for the rich and those with the power to negotiate. The rest of us clicking on take-it-or-leave-it contracts can pound sand. Section 38: https://cdn.robinhood.com/assets/robinhood/legal/Robinhood%20Customer%20Agreement.pdf https://cdn.robinhood.com/assets/robinhood/legal/Robinhood%2...
- WrtCdEvrydy 6y agoWhat if you're not a user and these trade restrictions affected your trades outside of the RH platform? It's illegal to dump products on a market (physical products) below price... yet some a-hole can force their plaform into "sell-only" mode and it's all cool.
- f-word 6y agoHi! Sorry, not an american. Exactly how is it legal to forego your right to a fair trial on an "agreement" between two parties who for any intents and purposes do not know each other?
- jaywalk 6y agoClauses like this are put in there to try and protect from nuisance lawsuits. But in a case like this, it will certainly not protect them.
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- ummonk 6y agoD1 capital is a Robinhood investor and was reported to have lost 20% in the markets due to this revolt.
- mmmeff 6y agoYep, how is this not market manipulation?! https://www.crunchbase.com/organization/robinhood/company_financials https://www.crunchbase.com/organization/robinhood/company_fi... https://www.bloomberg.com/news/articles/2021-01-28/dan-sundheim-s-20-billion-d1-capital-loses-about-20-this-month https://www.bloomberg.com/news/articles/2021-01-28/dan-sundh... I'm sure there are other investors on that list losing money from this whole thing too.
- Aunche 6y agoThis narrative doesn't make any sense. Hedge funds aren't a monolithic entity. Some hedge funds lost billions of dollars on shorts. Redditors made millions of dollars. Where do you think the rest of the money went to? That's right, other, more powerful, hedge funds. BlackRock held 9.2 million shares as of a few weeks ago.
- dan-robertson 6y agoBlackRock hold everything. It doesn’t really mean anything to say that they hold a lot of shares in some particular company. You might as well have just written “GameStop is a publicly traded US company” and one would deduce that BlackRock owns a lot of shares in it.
- the_local_host 6y agoBlackRock had 13% of GameStop. That's more consistent with taking a real stake than just happening to own it along with a piece of everything else. https://www.reuters.com/article/us-blackrock-investment-gamestop/blackrock-may-have-raked-in-2-4-billion-on-gamestops-retail-driven-stock-frenzy-idINKBN29W22T https://www.reuters.com/article/us-blackrock-investment-game...
- deleted 6y ago[deleted]
- MichaelDickens 6y agoBlackRock owns a similar % of the entire market, so this isn't too surprising. BlackRock has about $9 trillion AUM, and the global stock market is worth around $100 trillion. (Not all of that $9 trillion is stocks, but BlackRock still owns a notable percentage of the total stock market.)
- m4eta 6y agoLinkedin is your friend. A lot of top people came from Blackrock. lol.
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- psswrd12345 6y ago100% this, very eloquently said
- simias 6y agoWhile what you say is plausible, can't it also simply be that they saw a gigantic portion of their userbase making these incredibly risky bets and they were worried that it'd end up blowing in their face?
- newfeatureok 6y agoThat doesn't make any sense because they still allowed them to sell, realizing a loss. Why not stop buying and selling?
- castlecrasher2 6y agoThis right here. Only allowing sells appears to be blatantly anti-retail investor, intended to help drive down prices for those with short positions needing to be closed.
- imtringued 6y agoExactly. How are retail investors supposed to benefit if they are forced to wait until the stock they just bought tanks? If anything that's a direct attack at the value of your portfolio.
- isoprophlex 6y agoWSB have been yoloing their trades since forever. This is some anticompetitive bullshit, plain and simple.
- beagle3 6y agoA broker is nit your friend who refuses to buy junk food for you because he suspects you’ll be sick. A broker is yiur fiduciary/agent; their discretion at refusing your order should be limited to well defined circumstances, and I would be surprised if this is one of them. (I would not be surprised if the EULA lets them do what they want, but I would be surprised if it would actually be found legal in court —- though it will likely take ages to test because it likely contains a binding arbitration clause)
- jacobsenscott 6y agoOnly a small fraction of RH's customers bought into the fantasy they are fighting some kind of revolution against hedge funds (or that 'the smoking man' paid them a visit in the night...). The vast majority don't care about any of these stocks. Also, by making trading so easy RH has a responsibility to protect amateur investors from making terrible financial decisions. If you really want to buy game stop stock or whatever there are plenty of ways to do so. So they are by no means "screwing" their customers.
- always_left 6y agoProtecting them is one thing, but ceasing all buys before the market opens and without warning is irresponsible.
- colonwqbang 6y ago> Also, by making trading so easy RH has a responsibility to protect amateur investors from making terrible financial decisions. I strongly disagree with this. Nobody can know beforehand what is a good investment or not. The omnipresent disclaimer applies: "All investments involve risks, including the possible loss of capital." The idea that the professionals know something that the rest of us don't, is quite controversial and there are many articles giving evidence to the contrary. https://www.researchgate.net/publication/234025489_The_Actively-Managed_vs_Index_Fund_Debate_is_Still_One_of_the_Hotest_Topics https://www.researchgate.net/publication/234025489_The_Activ... This idea is also quite condescending (my own opinion, no references given).
- imtringued 6y ago>The vast majority don't care about any of these stocks. Are you crazy? Robinhood just sent a message to retail investors (it's entire customerbase) that they are going to crush you at any given time. By using Robinhood your are exposing yourself to extreme risk of losing your investments no matter what stock you trade. >Also, by making trading so easy RH has a responsibility to protect amateur investors from making terrible financial decisions. WSB is about making terrible financial decisions as a sport. That's the entire point.
- cft 6y agoAll robinhood orders go to Citadel for execution because that is how they make money. Citatel just bailed out Melvin who shorted GME https://www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddit-board-melvin-capital-closed-out-of-gamestop-short-position-tuesday.html https://www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddi... So the call to Robinhood was probably from Citadel. It's disgusting that instead of saying just this, they hypocritically "protected" their users.
- cft 6y agoTo the two downvoters , this is 1h after I wrote the comment: https://twitter.com/justinkan/status/1354853920762253315 https://twitter.com/justinkan/status/1354853920762253315
- alexfromapex 6y agoSo the exact opposite of what the real Robinhood would do?
- raducu 6y agoCitadel runs robinhood transactions and Citadel bailed out the hedgefunds. The house(Citadel) always wins.
- MuffinFlavored 6y agoEverybody screaming "class action lawsuit" is lying to themselves. I'm pretty confident this is totally within Robinhood's rights according to their terms and conditions (that everybody with an account agreed to).
- zucker42 6y agoRobinhood isn't only limited by its terms and conditions; there are also laws it has to comply with.
- ypeterholmes 6y agoSo is closing the account and moving to a better app.. Robin Hood is going to take this on the chin.
- jandrese 6y agoEULAs can't override federal law. That said, even if the SEC does rule against Citadel I wouldn't expect the fine to be anything that bothers Citadel. The message time and time again is that the fees are way less painful than not cheating in the first place.
- rayhendricks 6y agoYeah there’s something going on here. But they don’t realize that the Streisand effect will be or in full force in this. People are going to freak.
- victor106 6y agoIt didn’t make much sense to me yesterday when Chamath and others were saying the system was rigged against the small investors. It totally does today. These actions are nothing but The powerful signaling to the small investors whose turf they encroached on. I just shutdown my Robinhood (they have the audacity to use that name while stealing from the poor) account
- xiphias2 6y agoIt’s Citadel, they are holding the shorts, and they are the main customer of Robinhood. I think Citadel is winning this war, but people are moving in masses to Fidelity now that they learned why Robinhood is ,,free’’
- slim 6y agois robinhood a publicly traded company? are there any alternatives?
- jaywalk 6y agoThey're very close to doing an IPO. Or at least they were, before today. This could very well end up destroying the company.
- llampx 6y agohttps://i.redd.it/qwo8tf71f4e61.png https://i.redd.it/qwo8tf71f4e61.png
- dang 6y agoWe detached this subthread from https://news.ycombinator.com/item?id=25941689 https://news.ycombinator.com/item?id=25941689.