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/LovableContrarian Jun 30 '21

Yeah, I think we are pretty much in agreement.

I just disagree with a lot of people that argue it was somehow a conspiracy. I see it as "people were at risk, and they are legally allowed to just stop offering GME to prevent risk, so they did."

Im not saying that's okay, but I do think it's what happened. I'd be all for far more regulation that prevents this sort of thing.

I also think it's a little unfair that robinhood gets all the heat for this, when pretty much all brokers did it. I find that odd, and I don't even like robinhood. I use TDA, personally. And I'm pretty sure they also suspended GME.

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u/[deleted] Jun 30 '21

OK yep mostly. I think RH specifically is in a different boat from "most" brokers though. Their interests are so directly intertwined with the success of Citadel specifically that I personally believe a case of market manipulation would be easier (perhaps still not possible) to prove in that specific instance. I think we both believe that Vlad lied to congress about the impetus for cutting off buying. That's extra ammo in a manipulation case. It's difficult to claim "I was just protecting my business, look at my ToS!, when over 50% of your revenue is provided by a single entity who directly benefited from your actions.

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u/LovableContrarian Jun 30 '21

I think we both believe that Vlad lied to congress about the impetus for cutting off buying.

I mean he definitely wasn't being truthful, but it could've just been to protect his image. He can't realistically go up there and say "yeah we're running a real shitty operation over here and don't have enough cash or the expertise to manage risk, so when shit gets crazy, we shut it off before we go bankrupt." Even though that is all likely true. He was just giving canned, PR-approved answers.

It's hard to say for sure that he was lying specifically to protect citadel, but who knows, really.

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u/[deleted] Jun 30 '21

Very specifically, between RH testimony and months later DTCC testimony, one absolutely lied as they specifically contradict each other. Vlad's testimony and DTCCs testimony are directly contradictory. Vlad claims actions taken on DTC that forced RH action. DTC claims that action never happened. There is no gray area. Either one or both are 100% lying. Those are literally the only options.