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Right, but this is still a second-order effect of having more than 100% short on a stock and nobody anticipating it. So this is an example of something bad hap
by Judgmentality 6y ago
Right, but this is still a second-order effect of having more than 100% short on a stock and nobody anticipating it. So this is an example of something bad happening from a situation nobody anticipated. Even if it wasn't nefarious do you agree this is a problem?
I mean it's a problem in the sense we want the markets to be "fair" or at least governed by the rules we've set up, aka the SEC, FTC, etcetera. That's what I mean when I say it's a problem. I don't mean this is necessarily an existential threat on our financial system, but do you agree the markets were not working as intended because of this?
Based on what we know now, it seems like Robinhood (and other brokers) should be regulated differently (not that Robinhood was exactly by-the-books before this debacle). They publicly lied about a cash flow problem which alone seems worthy of fraud (I do not see how this could possibly be interpreted otherwise). They were extremely disingenuous about margin calls, and this is important when they are specifically targeting uneducated investors. I realize nobody was expecting this squeeze and expecting Robinhood (or anyone, including Citadel) to have that foresight isn't reasonable. But why not use the power of hindsight to fix this moving forward?