AOC and Ted Cruz slam Robinhood app for restricting retail investors trading in GameStop stock: ‘Unacceptable’

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Robinhood, TD Ameritrade and other trading platforms have placed restrictions on the trading of GameStop and other Reddit stock picks like AMC, BlackBerry and Nokia after the heavily shorted stocks saw rapid gains due to encouragement on the r/WallStreetBets subreddit.

Those following the stock market drama saw GameStop stock rocketing from below $20 earlier this month to more than $400 Thursday as a volunteer army of investors on social media challenged big institutions like hedge funds who had placed market bets that the stock would fall. Among the restrictions announced by Robinhood on January 28, the main one is about investors being able to sell their positions but not open new ones.

Robinhood has said it will also try to slow the amount of trading using borrowed money. “All the Robinhood users getting a message telling them they can only sell their meme stocks and can’t buy more get access to pre-market trading at 9am soooooo should be interesting to see what happens!” said Josh Billinson, news curator with Snap inc. 



 

TD Ameritrade also said that it had placed restrictions on certain types of trading activity on the companies “in the interest of mitigating risk for our company and clients. “What are the restrictions you’ve put in place? As stockholders of these equities, and using your platform to access and manage our portfolios, we have a right to know how that platform capability has changed particularly as they directly impact our profit and loss,” said one investor trading on the platform. 



 

Soon after the news broke about how retail investors were being restrained, Congresswoman Alexandria Ocasio-Cortez said it was “unacceptable” that such restrictions were being placed. “We now need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit. As a member of the Financial Services Cmte, I’d support a hearing if necessary”. Among her supporters was Republican senator Ted Cruz, who tweeted “Fully agree.” to Ocasio-Cortez’s stand on the matter.



 



 

Looking at how the two members of Congress on opposite sides of the political spectrum agreed, one tweet said: “reddit shitposters united the left and right on something”, while another said: “Both Ted Cruz and AOC agree on hearing and investigating Robinhood and retail services alike freezing stock purchase This is now bipartisan”. Another user commented: “You know you’ve goofed up when Ted Cruz and AOC are both mad at you”. 



 



 

Other Twitter users felt encouraged about the Congress members standing up for individual investors. One tweet said: “Hold @RobinhoodApp @TDAmeritrade accountable for their part in market manipulation!” while another Twitter user commented: “Billionaires shorted more shares than were in existence: Nothing. People started buying the opposite direction: nothing. Hedge funds lose billions to average people: Stop the game it’s time to do something It’s not hard to see who will lose here. Spoiler: It’s never the rich”.



 

#Holdtheline also trended on Twitter as some talked about a class action suit against the Robinhood app and other interactive trading platforms restricting trading to benefit the big players. One user tweeted at popular Youtuber MrBeast to get in on the action saying: “@MrBeastYT we kinda need some help with the robinhood stuff. #HoldTheLine seriously looking into a class action suit”, while another said: “PEOPLE if you have stock in AMC, GME, M, any shorted retail stocks, DO NOT SELL. #HoldTheLine The hedge funds and billionaires are trying to scare us into selling. DO NOT SELL!”



 

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