Various State Attorneys General Take Interest on Robinhood and its Dealings over Gamestop and others
Posted on 01/30/2021
Texas Attorney General Ken Paxton issued 13 Civil Investigative Demands (CIDs) to Discord, Robinhood Financial, Robinhood Markets, Robinhood Securities, Interactive Brokers, TD Ameritrade, TD Bank, E-Trade, WeBull Financial, Public Holdings, M1 Holdings, Citadel Financial, and Apex Clearing Corporation, regarding the prohibition of certain stock purchases, requiring higher margin reserves for trading certain companies, and suspending chat platform activity. In addition to public statements and internal documents, the CIDs request copies of all terms of service, policies related to content control and moderation, and communications between platforms and moderators of chat servers, including decisions to limit, control, or prevent access to the Discord r/WallStreetBets server.
“Wall Street corporations cannot limit public access to the free market, nor should they censor discussion surrounding it, particularly for their own benefit. This apparent coordination between hedge funds, trading platforms, and web servers to shut down threats to their market dominance is shockingly unprecedented and wrong. It stinks of corruption,” said Attorney General Paxton in a press release . “I’m hopeful that these companies will step up and cooperate with these CIDs in order to clear any confusion over why stock purchases were forcibly closed and why even conversation around these stocks was silenced.”
The press release adds, “Following the GameStop stock surge, the companies receiving CIDs took extraordinary and unusual steps to limit access to the market, including forcibly closing off access to American citizens attempting to make trades and investments.”
The day before, New York Attorney General Letitia James (D) in a statement said her office was “reviewing” trading on the Robinhood app relating to GameStop stock.
“We are aware of concerns raised regarding activity on the Robinhood app, including trading related to the GameStop stock,” James said. “We are reviewing this matter.”