Robinhood drops the confetti, but advisers aren’t convinced
Nicole Casperson, 06 April 2021
This week millions of Robinhood users may have noticed that the celebratory confetti graphics that used to rain down after each trade have been replaced with images of floating geometric shapes, according to an announcement from the company last Wednesday. Robinhood also changed the images it displays when a customer signs up for premium service Robinhood Gold or deposits money on the app.
The app’s infamous confetti graphic garnered heavy criticism of its gamification strategy during a Feb. 18 congressional hearing where Chief Executive Vlad Tenev testified. Continue reading “Article: Robinhood drops the confetti, but advisers aren’t convinced”
Robinhood Restricted-Trading Suits Will Play Out In Florida
Elise Hansen, 02 April 2021
Dozens of lawsuits against stock-trading app Robinhood over its move to block users from buying shares of GameStop and other volatile stocks will be centralized and moved to the Southern District of Florida, the U.S. Judicial Panel on Multidistrict Litigation said.
Panel Chair Karen K. Caldwell said Thursday that even though the suits have varied defendants and legal claims, there’s enough common ground to centralize the cases. Many of the plaintiffs and all of the defendants supported centralization, the order noted. Continue reading “Article: Robinhood Restricted-Trading Suits Will Play Out In Florida”
Melvin Capital Is Facing Nine Lawsuits Related to the GameStop Frenzy
Michelle Celarier, Institutional Investor, 22 March 2021
Gabriel Plotkin’s Melvin Capital, the hedge fund at the center of the GameStop trading frenzy in January, is a defendant in nine lawsuits by retail investors alleging a conspiracy to limit trading that caused them to lose money.
The hedge fund revealed the existence of the lawsuits in its annual ADV filing with the Securities and Exchange Commission.
Melvin was famously short GameStop and lost more than 50 percent during January following a short squeeze orchestrated by a Reddit forum called WallStreetBets, whose members included retail investors in GameStop. As the stock soared, various online brokerages catering to those investors, including Robinhood, restricted buying shares of GameStop, among other stocks heavily shorted by Melvin.
77% of people surveyed believe Robinhood’s restriction of meme stocks during the GameStop frenzy was market manipulation, new report finds
Isabelle Lee, 01 March 2021
A survey by data analytics firm Invisibly found that 77% of people believe Robinhood’s restriction of certain stocks at the peak of the Reddit-fueled frenzy amounts to market manipulation.
Commission-free trading app Robinhood has faced significant backlash and scrutiny in the weeks since January’s Reddit-fueled short squeeze, with CEO Vlad Tenev grilled by legislators at February’s congressional hearing over the company’s decision to restrict buying of many of the “meme stocks” at the heart of the saga.
The move took the wind out of the momentum trade, and marked the end of January’s retail trader phenomenon.
Now, a recent study by data analytics from Invisibly found that a majority of people surveyed believe Robinhood’s restriction of meme stocks was market manipulation.
The study, which surveyed 1,300 people during the first week of February, also revealed that 39% felt the market mania was “exciting and good” for investors, while 17% felt it was “exciting but a bad investment.”
28% said the trading phenomenon was a positive event, and “shaking things up from time to time is a good thing”, while 15% felt it was detrimental to markets. Meanwhile, 40% of respondents believe that Robinhood and other retail trading services restricted some stocks to help hedge funds.
The survey paints a stark picture of the public’s perception of what transpired in late January, despite Robinhood stating that it restricted trading of some stocks due to clearinghouse requirements.
Read Full Article
Robinhood Is In Talks With FINRA To Settle March 2020 Probe Into Options And Outages
Tyler Durden, Zero Hedge, 26 February 2021
At the center of the investigation was how Robinhood displays cash balances and buying power to its customers and the process that it undertakes to vet and approve traders for options trading. Continue reading “Article: Robinhood Is In Talks With FINRA To Settle March 2020 Probe Into Options And Outages”
The GameStop Mess Exposes the Naked Short Selling Scam
LUCY KOMISAR, 25 February 2021
At the House Financial Services Committee hearing last week on the GameStop debacle, there was an elephant in the room: naked short selling.
Short selling, effectively betting that a stock will go down, involves a trader selling shares he does not own, hoping to buy them back at a lower price to make money on the spread. The trader is supposed to locate (or have a “reasonable belief” he can locate) or borrow the shares in brokerage accounts, and then transfer them to the buyer within two days. This accounts for as much as 50 percent of daily trading. Continue reading “Article: The GameStop Mess Exposes the Naked Short Selling Scam”
How were more than 100% of GameStop’s shares shorted?
John McCrank, Reuters, 18 February 2021
But Vlad Tenev, broker Robinhood’s chief executive officer, recently pointed out that some of the stocks involved in the “meme stock” rally were more than 100% shorted, implying that more shares were shorted than were available to trade.
“I just think that’s pathological,” he said on the All-In Podcast late last Friday. “You end up with this situation that could destabilize the financial markets.”
Read full article.
Watch Live: GameStop Hearing On Market Manipulation
Jonathan Ponciano, 18 February 2021
A Congressional hearing into the GameStop mania that triggered the largest weekly selloff since late October is underway, with some of the key players in the saga—billionaire Citadel CEO Kenneth Griffin, Robinhood CEO Vladimir Tenev, Reddit Cofounder Steve Huffman and the 34-year-old securities broker behind the Roaring Kitty online persona—all set to testify.
Committee Chair Maxine Waters (D-Mo.) kicked off the hearing by asking Tenev whether he misled investors on January 28 when he denied that Robinhood had a liquidity problem despite raising more than $3 billion in the following days to meet reserve requirements from the Securities & Exchange Commission. Continue reading “Article: Watch Live: GameStop Hearing On Market Manipulation”
Explainer: How were more than 100% of GameStop’s shares shorted?
John McCrank, 18 February 2021
NEW YORK (Reuters) – One area of focus from a U.S. House of Representatives panel on Thursday will likely be on the role short selling played in the GameStop market mayhem.
Executives from trading platform Robinhood and hedge funds Melvin Capital and Citadel will be grilled following the retail-driven trading frenzy that sparked wild gyrations in GameStop and other heavily shorted stocks. Continue reading “Article: Explainer: How were more than 100% of GameStop’s shares shorted?”
House Hearing On GameStop Fiasco Will Focus On “Short Selling And Stock Manipulation”
Tyler Durden, Zero Hedge, 16 February 2021
In order to affect change, one has to understand the problem before them. It is by those standards we can confidently say we are near-certain that this week’s upcoming congressional hearings on the GameStop fiasco will be both a useless circus and a intellectual farce.
Read full article.
Exposing The Robinhood Scam: Here’s How Much Citadel Paid To Robinhood To Buy Your Orders
Tyler Durden, Zero Hedge, 14 February 2021
Frankly, we’ve had it with the constant stream of lies from Robinhood and neverending bullshit from the company’s CEO, Vlad Tenev.
With Tenev scheduled to testify on Thursday, alongside the CEOs of Citadel, Melvin Capital and Reddit, the apriori mea culpas have started to emerge – if a little too late – the former HFT trader spoke late on Friday on the All-In Podcast hosted by Chamath Palihapitiya, who had strongly criticized Robinhood over the trading restrictions, and Jason Calacanis, a Robinhood investor, and said that “no doubt we could have communicated this a little bit better to customers.”
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”
Vlad Tenev is the co-founder and CEO of Robinhood. A first-generation immigrant from Bulgaria, Tenev earned his B.S. in Mathematics at Stanford University before starting two finance companies in New York City, selling trading software to hedge funds. In 2013, Tenev and longtime friend Baiju Bhatt co-founded Robinhood, a zero-commission brokerage dedicated to democratizing the finance system. The company has millions of users across the country and is currently valued at $8.6 billion.
Continue reading “Subject: Vlad Tenev”