By restricting the trade, it could reduce the cushion of cash or margin, which he had to keep at his clearing house. The company eased some of the curbs on Friday and reduced the number of businesses with trade restrictions Monday to eight to 50.
The restrictions on trading by Robinhood caused an outcry among small investors, who claimed that the app that democratized trading was now bidding on Wall Street.
And the news that Robinhood raised $ 2.4 billion to facilitate the sidewalks of trading did not impress William Moyer of North Carolina. “It’s just them trying to cover their buttocks,” he said. “They realized last week that they were trying to talk very well, and now they are trying to correct by saying that they have the money there to be able to do all the transactions now.”
Moyer, a 26-year-old car service adviser who has been buying shares of GameStop, Nokia, AMC and BlackBerry for the past two weeks, said he was offended by Robinhood’s decision to restrict trading on the platform. “I had to suffer with my family until 2008,” he said, referring to the financial crisis in 2008. “I feel it’s just another way the big banks are showing that they control everything we do,” he said. he said. “They are just trying to prevent us as individuals from increasing wealth.”
Robinhood’s decision to restrict stock trading has also attracted the attention of lawmakers from all corners of the political spectrum. Representative Alexandria Ocasio-Cortez, New York Democrat, called it “Unacceptable.” Senator Ted Cruz, a Republican from Texas, tweeted her in agreement.
Lawmakers expect hearings to examine the role of Robinhood in volatility in January.
“I do want to make sure we understand what happened there,” Senator Pat Toomey of Pennsylvania, the leading Republican on the Senate Banking Committee, said during a Monday morning appearance on CNBC about the decision to restrict trade.
Representative Maxine Waters, the California Democrat who chairs the House Financial Services Committee, said last week that she would hold a hearing on short selling as well as “online trading platforms” and “gamification.” On Monday, the committee announced that it would hold a hearing on the GameStop issue on February 18.