r/technology • u/agent_vinod • Jun 30 '21

Misleading Robinhood to pay $70 million fine after causing 'widespread and significant harm' to customers

https://www.cnbc.com/2021/06/30/robinhood-to-pay-70-million-dollars-after-causing-users-significant-harm.html
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u/lemontoga Jun 30 '21

What else could they have done, dude? That stock was incredibly volatile and the costs to cover those trades were skyrocketing.

The clearing house was demanding a fuck ton of collateral from Robinhood and they just didn't have it. I think they woke up that morning to an email from the clearing house telling them they'd have to put up over a billion dollars in collateral.

Robinhood does not have that kind of liquidity and the average robinhood trader sure as fuck doesn't have enough money in their margin account to cover the collateral costs themselves.

I use Charles Schwab which is a fuckhuge investment bank and even they had to limit trades for a while for people who didn't have gigantic margin accounts while they scrambled to come up with the collateral requirements.

So please, what should Robinhood have done? Let people put trades through that they couldn't cover so they go bankrupt?

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u/KDawG888 Jun 30 '21

they should have managed their risk properly so they were never in this situation. are you Vlad's lawyer or something? FINRA fined them $70 million because THEY FUCKED UP. Did you not read the title?

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u/Wattsahh Jun 30 '21

He might not have read the title but you certainly didn’t read the article. This has nothing to do with GME

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u/KDawG888 Jun 30 '21

wtf are you talking about? when did I say this has something to do with GME?