Re:Robinhood reports 43% revenue decline
by WoahNoun on Friday April 29, 2022 @04:36PM
(#31210309)
Disabling sells and not letting someone exit a position is infinitely worse then not letting someone buy to enter a position. The latter is only theoretically harmed and has no case to sue; the former is provably harmed and can sue.
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It is hard to say the latter is only theoretically harmed when the rising price was caused by retail FOMO (according to SEC report) and Robinhood managed the majority of retail orders....
Re:Robinhood reports 43% revenue decline
by WoahNoun on Saturday April 30, 2022 @01:15AM
(#31213528)
It is a theoretical harm. Securities law focuses on "obviously lost money" such as not being able to sell at the highs when you own the stock. This is very different from the theoretical price ceiling caused by retail FOMO. Otherwise every person on earth could sue to claim they were harmed by not being able to buy.
From the SEC's POV, a single brokerage stopping buying still means there was an open market. Robinhood FOMOers used margin accounts and instant deposit feature to drive the price up until Robinhood could no longer afford the loans they were offering. Fidelity never stopped allowing buys because they could afford the settlement collateral.