Name: UK traders consider legal action against Robinhood and Trading 212 for restricting GME trades
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UK traders consider legal action against Robinhood and Trading 212 for restricting GME trades

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This week has largely been defined by a drama involving a finance group, an ailing video game shop, and for hedge fund managers, with the world eagerly watching share after an online community worked together to buy its stock en masse.In the story’s latest twist, many of the traders who bought up stocks of GameStop and AMC are now considering legal action against the online trading platforms they used, after were introduced as the shares looked to grow further. Others are simply angry and pessimistic anything can be done.Traders feel cheated after Robinhood and Trading212 limited trading on Thursday for anyone buying and selling stocks of GameStop, AMC, Blackberry – the firms targeted by the Reddit community – and are accusing the platforms of corruption. Many say the action deprived them from being able to invest , protecting hedge funds from making further losses.In an on Thursday night, Robinhood cofounder Vlad Tenev said the company did not act in the interest of any other firms in deciding to halt trading of the stocks, amid calls from Redditors to sue the company for its intervention.Hedge fund managers borrowed GameStop stock while the price was low, expecting it to fall further, in a process known as shorting. Retail investors on the /r/WallStreetBets subreddit decided to buy shares of the ailing video game retailer GameStop en masse, causing stocks to go wild.Ethan Brown has been a member of R/wallstreetbets for a year and chose not to invest in GameStop thinking the ship had sailed – he laughs at that thought now – but he bought into BlackBerry and AMC through Trading212. He’s angry at the platform for first allowing day traders to put money into them and then stopping people from buying more, and only allowing them to sell instead.On Thursday users trying to buy the stock received a message saying: “In the interest of mitigating risks for our clients, we have temporarily placed GameStop in reduce-only mode as highly unusual volumes have led to an unprecedented market environment.”Trading212 an update on Friday saying trading was enabled again, while Robinhood said limited . Ethan feels Thursday’s action had huge irreparable impacts. “Obviously if no one could buy the stock it was inevitable that the stock would come down and all this would do is initiate fear into people resulting in them selling”, he told . “This would help the big hedge funds lose less money. They manipulated the market yesterday in front of the entire world and showed their true colours of who they really do care about and that’s the big billionaire Wall Street guys who can’t deal with losing at the game they’ve been controlling this whole time.”He’s furious at the action and said he would love to take legal action against Trading212. “It makes me feel angry that we still live in a world of where even if the rich lose they can still corrupt the system in their favour. These brokers will happily protect them when they’re about to lose everything, but if someone like me or you – the 1 per cent – make a trade that doesn’t go in our favour which loses money, we lose everything and that’s it.”One of the things people are the most furious about is the claim that Trading212 had their interests in mind. Callum Edwards said the trading platforms were happy for novices to gamble away their life savings on other types of contracts “without any real checks that they know what they’re doing, but are severely unhappy with people investing and holding a stock that is expected to increase in value”“They are a broker and that’s their business but they’re not financial advisors and they don’t offer to manage my finances usually,” he told .Traders are questioning how the company’s actions constituted a free market.“When trading stocks you accept the risks and should be opened to a free market, to have the option to buy a share taken off multiple platforms and have the price manipulated pushes the risk onto the masses and pulls the risk from the big hedge funds,” James Hutchinson told . He wanted to buy into GameStop but was stopped by Trading212. “This isn’t a fair open market. Everyone should have equal risk, regardless of status, and shouldn’t have my platform prevent me from ‘risky’ stocks if I’m happy with and have accepted the risks.”“They should be taken to court and I’m all for it,” said James.In spite of this, many are pessimistic anything will be done. Both Ethan and James said that unless people start mass action against the platform he can’t see anything happening. “I can only show my disapproval with my pocket, so I will be leaving Trading212 for another broker”, Ethan said. He’s also looking into other options such as complaining to the Financial Conduct Authority, a financial regulatory body in the United Kingdom.Many have compared the GameStop frenzy to a David and Goliath situation, with everyday people successfully taking on Wall Street hedge funds. The reality is for those involved, the past 24 hours have felt like brazen example of injustice and vested interests. “I want [the trading platforms] to be shown they can’t do this and f**k over the masses,” said James.

This week has largely been defined by a drama involving a finance group, an ailing video game shop, and for hedge fund managers, with the world eagerly watching share after an online community worked together to buy its stock en masse.In the story’s latest twist, many of the traders who bought up stocks of GameStop and AMC are now considering legal action against the online trading platforms they used, after were introduced as the shares looked to grow further. Others are simply angry and pessimistic anything can be done.Traders feel cheated after Robinhood and Trading212 limited trading on...

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Ruchira Sharma

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UK traders consider legal action against Robinhood and Trading 212 for restricting GME trades

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