Robinhood is required to place a deposit using its own funds at a clearinghouse to cover risks until trades are settled between a buyer and seller. Photograph: Olivier Douliery/AFP/Getty ImagesĪccording to Tenev, Robinhood and other brokers had no choice but to suspend trading in GameStop and other hot investments during this period of “historic volatility”. Tenev apologized for the trading ban at a sometimes fractious hearing. “Despite the unprecedented market conditions in January, at the end of the day, what happened is unacceptable to us,” Tenev said. Tenev once again apologized for the trading ban. At one point, short-sellers had borrowed far more of GameStop’s shares (140%) to sell short than were available on the market. Shares in the Texas computer game retailer surged 1,600% in January as small investors worldwide – many coalescing on the Reddit forum WallStreetBets – piled into the troubled retailer’s shares betting against Wall Street hedge funds that had bet the share price would collapse – a practice known as short-selling. “The buying surge that occurred during the last week of January in stocks like GameStop was unprecedented, and it highlighted a number of issues that are worthy of deep analysis and discussion,” Tenev said. Vlad Tenev and other players in January’s GameStop saga appeared before the House financial services committee in the first public hearing in a wide-ranging investigation into trading in GameStop, AMC and other companies whose share values soared as small investors piled into the stocks.
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