3 ms·
To some degree, they have a legal responsibility due to the "suitability standard" (link below) to do this. While they aren't recommending GME and the others pe
by totalZero 6y ago
To some degree, they have a legal responsibility due to the "suitability standard" (link below) to do this. While they aren't recommending GME and the others per se, they certainly profit from the order flow as well as new account sign-ups. People may be making money now, but those who lose their shirts -- especially if the RH platform crashes when they try to exit a position -- are going to be angry. Preventing purchases in the first place is a way to keep those people from litigating, and to demonstrate to regulators that RH didn't attempt to profit from a mad dash toward unsuitable investments.
https://www.finra.org/rules-guidance/rulebooks/finra-rules/2111 https://www.finra.org/rules-guidance/rulebooks/finra-rules/2...
Their platform is probably inundated with open orders on these few names, as the price is all over the place. They had outages back in March 2020 and presumably there's a risk of the same if everyone tries to close their positions at the same time (eg, if u/deepf**ingvalue announces that he has exited).