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A comment on Robinhood is facing nearly 50 lawsuits over GameStop frenzy. Parent comment

Re:Robinhood is facing nearly 50 lawsuits over GameStop frenzy by minsc__and__boo on Wednesday March 03, 2021 @11:24AM (#26330544)
For margin trading, sure, but IIRC Robinhood halted all trading, even with your own money.

I think it has more to do with Robinhood giving away free trading, while the trades themselves have a non-zero variable cost to Robinhood. Since their revenue comes from selling insightful user trade data, a run on GME isn't insightful and had diminishing returns (my hypothesis anyways).

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Re:Robinhood is facing nearly 50 lawsuits over GameStop frenzy by erik_seaberg on Wednesday March 03, 2021 @08:53PM (#26337618)
I’ve seen claims that having settled funds doesn’t matter, that the brokerage must keep collateral at the clearinghouse and they cannot use customer’s money to do it: https://news.ycombinator.com/item?id=25981493. The clearinghouse suddenly demanded a lot more collateral for that stock (because its eventual value is so uncertain) and a lot of brokers couldn’t or didn’t want to meet it.

They also didn’t want to say anything that might give an impression of being insolvent (especially when it isn’t true).

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