Massachusetts May Revoke Robinhood’s Broker-Dealer Registration
PYMNTS, 16 April 2021
Regulators in Massachusetts are taking steps to pull Robinhood’s broker-dealer license, alleging that the digital trading app lures inexperienced investors and puts their money at risk, Reuters reported. Robinhood responded to the charge with a lawsuit accusing the Commonwealth officials of being “elitist.”
Massachusetts Secretary of State Bill Galvin announced in December 2020 that the state was seeking to revoke Robinhood’s license — and that was before the GameStop trading frenzy. The state instituted changes in its fiduciary rules that took effect in September, prompting the Silicon Valley startup to file a lawsuit in Boston. The company also filed a motion for a preliminary injunction. Continue reading “Article: Massachusetts May Revoke Robinhood’s Broker-Dealer Registration”
Bursor & Fisher Makes Play To Lead Robinhood MDL
Nathan Hale, 15 April 2021
Bursor & Fisher PA touted its experience in class actions and multidistrict litigation as well as multiple clients with significant financial interest as it made a bid Wednesday to lead multidistrict litigation over stock-trading app Robinhood’s decision to block users from buying certain volatile stocks including GameStop.
The boutique firm, which has offices in California, Miami and New York, filed its motion to serve as lead counsel alongside a request from six clients — Eric Quat, Aaron Fassinger, Mike Ross, Igor Kravchenko, Michael McFadden and Tenzin Woiser — to serve together as lead plaintiffs for the dozens of cases against Robinhood Financial LLC and other entities that were centralized earlier this month in the Southern District of Florida. Continue reading “Article: Bursor & Fisher Makes Play To Lead Robinhood MDL”
The Reddit revolt: GameStop and the impact of social media on institutional investors
Annabel Smith, 13 April 2021
The Reddit revolution in the US has drawn attention to the potential power that a growing force of retail investors can wield in stock markets when equipped by social media.
Amateur investors have increasingly engaged with retail platforms in the last year, partly due to the pandemic leaving them idol at home, but also due to the newfound onslaught of information through social media and access to the market through retail brokerages and platforms such as Robinhood. Continue reading “Article: The Reddit revolt: GameStop and the impact of social media on institutional investors”
Robinhood Says 9.5 Million People Traded Crypto on Its App in Q1
Will Gottsegen, 09 April 2021
The online brokerage service Robinhood said on Thursday that 9.5 million of its customers traded cryptocurrency on its platform in Q1 of 2021.
That’s up from just 1.7 million in Q4 of last year, a 458% spike.
In a blog post, the company chalked up the numbers to crypto’s growing “popularity”: the global market cap of all cryptocurrencies has doubled in the past three months to over $2 trillion. Continue reading “Article: Robinhood Says 9.5 Million People Traded Crypto on Its App in Q1”
Rosen Law Aims To Lead Securities Claims In Robinhood MDL
Elise Hansen, 06 April 2021
The Rosen Law Firm PA on Tuesday sought to spearhead securities claims against Robinhood in newly centralized suits over the stock-trading app’s decision to block users from buying certain volatile stocks such as GameStop.
Cody Todd requested to serve as lead plaintiff for certain Robinhood Markets Inc. customers, with the Rosen Law Firm as lead counsel. The motion is the first such request since the suits were centralized in Florida federal court last week. Continue reading “Article: Rosen Law Aims To Lead Securities Claims In Robinhood MDL”
GameStop shares fall as company looks to cash in on Reddit surge
Staff and agency, 05 April 2021
Shares in GameStop fell on Monday after the video-game retailer said it may sell up to $1bn (£720m) worth of stock as it tries to make the best of the 900% surge in its shares from a Reddit-driven rally this year.
The company said it would sell up to 3.5m shares and use the proceeds to speed up its shift to e-commerce in an overhaul being led by the billionaire Ryan Cohen, its biggest shareholder and a board member of GameStop. Shares in the company fell sharply in pre-market trading in New York but had recovered by the close to $186.95, a fall of 1.9%. Continue reading “Article: GameStop shares fall as company looks to cash in on Reddit surge”
Report: Robinhood Is Building A Platform To Democratize IPOs
Sarah Hansen, 25 March 2021
Robinhood is working on a platform that will allow its users to buy into initial public offerings, Reuters exclusively reported Thursday, citing people familiar with the process, marking another push by the popular investment app to democratize investment opportunities that are traditionally only available to big banks and Wall Street firms.
The allocation of IPO shares is a complex process—it doesn’t happen the same way for every listing and can depend on the type of industry and market conditions at the time. In general, the majority of available shares go to institutional investors. Some shares can also be reserved for retail investors, who are then able to buy them through their brokerage firms. More established and wealthier retail investors often have a better chance of receiving IPO shares than lay people, especially in popular listings. Continue reading “Article: Report: Robinhood Is Building A Platform To Democratize IPOs”
GameStop stock surge lingo: Here’s what Reddit’s WallStreetBets vocabulary means
Katie Conner, 19 March 2021
Reddit’s community, WallStreetBets, is still assisting in the rise of GameStop’s stock, which is currently sitting at $272 per share and even hit an all-time high last week. Reddit users are battling it out with Wall Street to keep GameStop’s stock prices soaring while Wall Street expected a crash. Small investors are using Reddit communities to drive “meme stocks,” causing short sales and https://www.investopedia.com/terms/s/shortsqueeze.asp. And it’s not just GameStop. Other companies, like AMC and Nokia, have also been affected by the coordinated surge.
No, this doesn’t mean you should necessarily drop everything and fully invest in the stock of the moment. Some are calling the market manipulation a “Ponzi scheme,” and the stock price will likely even out once the hullabaloo dies down.
In fact, broker TD Ameritrade restricted trading of the GameStop and AMC stocks on Jan. 26 and continues to post an advisory note to clients about market volatility. Trading app Robinhood followed suit on Jan. 27 in response to the runaway growth — the company got itself into trouble by restricting stock trades and will be closely reviewed by the SEC (It’s currently limiting buys on AMC and GameStop stocks). The White House has said it’s monitoring the situation.
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How Regulating GameStop’s ‘Market Manipulation’ Could Harm Crypto
Benjamin Sauter, Steven Perlstein, William McGovern and David McGill, 02 March 2021
The ongoing roller-coaster ride of GameStop, dogecoin and other so-called meme stocks has led day traders, market makers and exchanges to attack each other with knee-jerk accusations of “market manipulation.” When this happens, the primary winners are government regulators seeking to expand the scope of their authority. Industry cries of market “manipulation” – from all sides – are not only shortsighted. They also risk setting the market on a path towards an enforcement framework that all market participants may come to regret, no matter what side they think they are currently on.
Reddit takes on Wall Street
Since early this year, by sharing tips and organizing on social media platforms such as Reddit and Twitter, individual traders have been able to rally prices of meme stocks to unbelievable heights. First, it was GameStop, AMC and a handful of other targets, with traders sending prices skyward 1,500% or more. Then, traders set their sights beyond the securities markets: dogecoin (DOGE) rose over 800% in 24 hours after a tweet from Elon Musk rallied the masses behind it.
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Report: Feds Investigating Meme Stock Frenzy For Market Manipulation
Sarah Hansen, 11 February 2021
Federal authorities are investigating whether massive gains in “meme stocks” like GameStop in January were caused by market manipulation or other illegal behavior, the Wall Street Journal reported Thursday.
In January, individual traders from online communities like Reddit’s r/WallStreetBets forum and users of popular online brokerage apps like Robinhood were a driving force behind the meteoric rise of a handful of previously unpopular stocks. The traders pitted themselves against major hedge funds who had bet that the price of stocks in struggling companies like GameStop, AMC Entertainment, and Blackberry would fall in a practice called short selling. The rapid surge of interest from retail investors pushed the price of those stocks to record levels, and hedge funds like Melvin Capital faced massive losses as a result. At the peak of the frenzy, Robinhood restricted trading on shares of GameStop and a handful of other stocks, prompting a swift backlash from lawmakers and multiple class-action lawsuits from traders who said they had missed out on gains.
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What Investors Should Learn From Reddit, GameStop, Market Manipulation And Other Recent Headlines
Bob Carlson, 11 February 2021
Over the last couple of weeks, the financial headlines have been dominated by market manipulation, GameStop, short squeezes, Reddit frenzies and other uncommon topics. A little perspective makes it easier to understand these events and how they should affect your investment strategy.
The big news was the strong increase in the price of the stock of GameStop, a video game retailer that many investors thought was slowly dying. The price apparently increased because a large number of members in a forum on the Reddit web site said investors should buy the stock. Continue reading “Article: What Investors Should Learn From Reddit, GameStop, Market Manipulation And Other Recent Headlines”
Government agencies probe GameStop pump over potential illegal manipulation
DUNCAN RILEY, 11 February 2021
U.S. government agencies have launched federal investigations into whether the social-media-driven activity around GameStop Corp.’s share price rise in January constituted illegal market manipulation.
According to a report today in The Wall Street Journal, both the U.S. Department of Justice and the Commodity Futures Trading Commission are formally investigating the pump of GME stock, and the Securities and Exchange Commission is also reviewing the matter.
The investigation by the justice department is being led by the department’s fraud section and the San Francisco U.S. attorney’s office who have sought information about the security activity from brokers and social media companies that were at the center of the trading frenzy. Subpoenas are said to have been issued for information to brokers including Robinhood Markets Inc. that was widely used by those buying up GameStop and other shares such as AMC Entertainment Holdings Inc. Continue reading “Article: Government agencies probe GameStop pump over potential illegal manipulation”
Robinhood Users Face Uphill Fight For TRO In GameStop Suit
Craig Clough, 10 February 2021
A California federal judge indicated Wednesday that she is unlikely to issue a temporary restraining order or preliminary injunction against Robinhood Financial LLC to prevent it from blocking specific transactions on volatile stocks after a user suing the company said the online trading platform’s recent actions were “unprecedented.”
The lawsuit before U.S. District Judge Virginia Phillips is one of more than 30 civil suits Robinhood is facing over its decision late last month to block users from buying shares of GameStop, AMC and other volatile stocks recently caught up in a well-publicized trading frenzy. Continue reading “Article: Robinhood Users Face Uphill Fight For TRO In GameStop Suit”
Investigations Into GameStop Trading And Reddit: Former SEC Enforcement Chief Provides Insights
Bruce Brumberg, JDN, 9 February 2021
The Reddit/GameStop aftermath continues. Now, it’s been reported, investigators at the US Securities and Exchange Commission (SEC) are allegedly scouring posts on social media and online message boards for evidence of fraud and coordinated stock-price manipulation in the hype that led to recent unlikely surges in the stock prices of GameStop, AMC Entertainment Holdings, and a few other companies.
What goes on in these types of SEC investigations? Are individual investors who contributed to the online buzz about these companies really at risk of SEC enforcement actions or criminal prosecution? What about the legality of the decision by trading app Robinhood and other online trading platforms to temporarily restrict trading in the stock of GameStop and the other targeted companies? Continue reading “Article: Investigations Into GameStop Trading And Reddit: Former SEC Enforcement Chief Provides Insights”
The Stock Market Is Broken, Now For All To See
Authored by Wolf Richter via WolfStreet.com,
The historic short squeeze, engineered by a bunch of deeply cynical small traders, exposed just how rigged the market has been…