Photographer: Gabby Jones / Bloomberg
Photographer: Gabby Jones / Bloomberg
Robinhood Markets Inc. reduced the number of companies with trading restrictions from 50 to eight, ahead of Monday’s trading session, according to an update on the 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.
Opening new positions in these securities is limited according to the Robinhood website, which lists the maximum number of stocks and options contracts each user can hold. For those whose current holdings already exceed the limits, their positions will not be sold or closed.
Robinhood has introduced buying restrictions following the clearinghouse stock deposit requirements last week, the company said in a blog post on Friday. “It wasn’t because we wanted to prevent people from buying these stocks,” Robinhood said.
The trading app, popular among retail investors who have helped the rise of GameStop stock, is under fire across the political spectrum for its decision to restrict high-flying stocks trading which surged after being touted on social media.
Senator Elizabeth Warren on Sunday called for a broader review by the US Securities and Exchange Commission of recent trading swings, saying that a broker-dealer like Robinhood, which invites many individual investors, must operate “by some ground rules.”
Robinhood’s Trade Restrictions Not Illegal: Fmr. SEC advisor (video)
“You can’t do that in the middle of a trading cycle,” Warren said of Robinhood’s trading limits on CNN’s “State of the Union.” “It’s not about protecting people from bad transactions. It’s all about keeping the playing field up to standard. “
A Robinhood representative declined to comment after the website update.
Multiple lawsuits have been filed against Robinhood mainly because of restrictions by the trading platform that amounted to breach of contract. Still, investors suing online brokers over allegations that they have been falsely blocked from trading stocks can wait a long time for their cases to be resolved.
– With the help of Annie Massa and Meghan Genovese
(Updates with more details everywhere)