Feds Seized Robinhood CEO's Phone in GameStop Trading Halt Investigation
Robinhood, the stock trading app that was subject to a record fine Wednesday, announced it intends to go public Thursday. From a report: In its filing documents, the company admits that many of its customers are furious about how it handled January's GameStop stock bonanza and that it is currently subject of at least 49 class action lawsuits related to trading restrictions it placed on the stock in January. The company also said it is under investigation by a series of regulators, state attorneys general, the SEC, and the U.S. Department of Justice in proceedings associated with the trading restrictions; the company said its CEO Vladimir Tenev has also had his cell phone seized by federal attorneys. In January, Robinhood restricted the purchase of GameStop, AMC, and other "meme" stocks because the app literally did not have enough money to comply with regulations that require a certain amount of liquidity from companies that allow for stock trading. This restriction correlated with a days-long dive in the stock prices of GameStop, which skyrocketed in January and February and led to widespread calls from lawmakers, traders, and Redditors on the WallStreetBets subreddit to investigate Robinhood. Those investigations are ongoing, according to Robinhood's S-1 filing with the SEC. In its filing, Robinhood states that the fallout from these restrictions still have the potential to be disastrous for the company. âoeWe have become aware of approximately 50 putative class actions ... relating to the Early 2021 Trading Restrictions."
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