Re:Class Action Lawsuit Filed Against Robinhood
by shawabawa3 on Thursday January 28, 2021 @05:45PM
(#25950596)
It's absolutely not the same
Trading halts are at the exchange level and stop _all_ buys and sells
What happened here is some brokers/clearing houses prevented _retail traders_ from buying, but not from selling
Re:Class Action Lawsuit Filed Against Robinhood
by boh on Thursday January 28, 2021 @06:16PM
(#25950919)
Exchanges are able to decide what to halt (obviously since that's what they did). The SEC/class action suits are free to argue the issue, but the likelihood the suit will succeed is low and SEC intervention (beyond an opinion statement) is also low. In the investment space, retail investors are generally treated like children who need to be protected (that's what the SEC is mostly tasked with). RH will make the argument that it was protecting the children from hurting themselves and the SEC will likely go along with it (that's their assumption anyway). Fairness isn't something you generally see in trading.
Retail investors are RH's biggest customers. They're diminishing their risk of suits they'd likely lose/regulatory scrutiny by halting buys. The SEC will more likely hit you for allowing pumps rather than preventing them.