Photographer: Gabby Jones / Bloomberg
Photographer: Gabby Jones / Bloomberg
Robinhood Markets Inc. reduced the number of companies with trading restrictions from eight to 50 before the trading session on Monday, according to an update of its website.
The current list includes GameStop Corp., AMC Entertainment Holdings Inc., BlackBerry Ltd., Express Inc., Genius Brands International Inc., Koss Corp., Naked Brand Group Ltd. and Nokia Oyj.
The opening of new positions in these securities is limited, according to the Robinhood website, with the maximum number of shares and option contracts each user can hold. For those whose current holdings already exceed the limits, their positions will not be sold or closed.
Robinhood imposed buyout restrictions after requiring deposits for shares increased last week, the company said in a blog post on Friday. “It was not because we wanted to stop people from buying these shares,” Robinhood said.
The trading app, which was popular with retail investors who promoted the rise of GameStop shares, was across the political spectrum under fire for his decision to restrict the trading of high-flying stocks that rose after being presented on social media.
Senator Elizabeth Warren on Sunday called for a broader review by the U.S. Securities and Exchange Commission of recent trade swaps, saying a broker like Robinhood that invites many individual investors should work according to some basic rules.
Robinhood’s Trade Restrictions Are Not Illegal: Fmr. SEC Advisor (video)
“You can’t do that in the middle of a trading cycle,” Warren said of Robinhood’s trade restrictions on CNN’s State of the Union. “It’s not about protecting people from bad transactions. It’s about keeping the playing field level. ”
A Robinhood representative declined to comment after updating the site.
Various lawsuits filed against Robinhood, mostly with the restrictions on the trading platform amounting to breach of contract. Investors who have sued online brokers over allegations that they have been unfairly blocked from trading stocks may have to wait a long time before their cases are resolved.
– With help from Annie Massa and Meghan Genovese
(Updates with more details throughout)