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Given massive financial losses are known to cause suicide, suddenly claiming someone owes money, and then taking that money immediately, is not reasonable. If

by olliej 6y ago

Given massive financial losses are known to cause suicide, suddenly claiming someone owes money, and then taking that money immediately, is not reasonable. If RH believes someone owes them money they should do what anyone else has to do - notify them via invoice or bill or whatever. If they were so concerned that the money they lied about was going to disappear they could have simply frozen this guys account. Again, massive financial loss has a well established causal relationship to rapid suicide. You can’t simply steal this amount of money and then claim that this was not a foreseeable outcome.

djbebs 6y ago
Nothing was stolen. He sold a put, and that put was exercised. He didn't have the cash to pay for it, so he was margin called and his portfolio was liquidated accordingly. Until the liquidation happened, he still owed the cash. This is the way these products are supposed to work. These are complex products that arent for everyone, thats why you have to take a test and swear you're aware of the risks involved. He took the test and passed, he also executed the strategy correctly. The problem is not robinhood here. Its not even the money. The problem is the parents are looking for someone to blame because of something that hurt them.
- unanswered 6y ago
  From TFA, the problem was not the $700k margin call, it was the lie that a $170k transfer was needed to make the account whole. You're conflating two different issues here.
  - djbebs 6y ago
    Those are one and the same. He was 700k in debt, and needed to transfer 170k immediately or his account would be liquidated to make do on that debt. That isn't a lie, it is quite literally what a margin call is.
jimmyvalmer 6y ago
massive financial loss has a well established causal relationship This is the kind of huh? argument that makes ambulance chasing so lucrative in the wild and woolly American legal system. No retail, mass-market company could have forestalled that Darwin Award, but RH has to figure it's a very real if improbable cost of going after bottom feeders (kids and poor people).
Dma54rhs 6y ago
Maybe so, but all it will bring is making trading for the retail even more difficult and cumbersome. During the GME saga people didn't understand they were also on loaned money for the time being sell or buy takes 2 days to clear.

by olliej 6y ago

djbebs 6y ago

Nothing was stolen. He sold a put, and that put was exercised. He didn't have the cash to pay for it, so he was margin called and his portfolio was liquidated accordingly. Until the liquidation happened, he still owed the cash. This is the way these products are supposed to work. These are complex products that arent for everyone, thats why you have to take a test and swear you're aware of the risks involved. He took the test and passed, he also executed the strategy correctly. The problem is not robinhood here. Its not even the money. The problem is the parents are looking for someone to blame because of something that hurt them.

unanswered 6y ago
From TFA, the problem was not the $700k margin call, it was the lie that a $170k transfer was needed to make the account whole. You're conflating two different issues here.
- djbebs 6y ago
  Those are one and the same. He was 700k in debt, and needed to transfer 170k immediately or his account would be liquidated to make do on that debt. That isn't a lie, it is quite literally what a margin call is.

jimmyvalmer 6y ago

massive financial loss has a well established causal relationship This is the kind of huh? argument that makes ambulance chasing so lucrative in the wild and woolly American legal system. No retail, mass-market company could have forestalled that Darwin Award, but RH has to figure it's a very real if improbable cost of going after bottom feeders (kids and poor people).

Dma54rhs 6y ago

Maybe so, but all it will bring is making trading for the retail even more difficult and cumbersome. During the GME saga people didn't understand they were also on loaned money for the time being sell or buy takes 2 days to clear.