RobinHood, Interactive Brokers, and Ameritrade suspended the purchase of some shares. Discord also vetoed the server from the subreddit belonging to the WallStreetBets group.
Wall Street shows an unusual reaction to the recent events regarding the video game chain GameStop’s actions. Due to retail investors’ movements, the shocking rise in prices is now creating restrictions on what is supposed to be a free market.
The companies RobinHood, Interactive Brokers, and Ameritrade, which are intermediaries for the sale of shares between private users, announced that the acquisition of titles for GameStop, for example, suffered a suspension until further notice. Traders can only sell or hold their positions.
The same situation is happening with other companies such as the AMC cinema chain, Blackberry, Nokia, Bed Bath & Beyond, Express, Koss Corporation, and Naked Brand Group. The latter also got a suspension from the Robinhood application. The investment services allege that there is volatility, so these preventive actions aim to protect all their users.
“To reduce the risk for our company and our clients, we have established various restrictions on some transactions with $ GME, $ AMC, and other securities. We took these steps out of an excess of caution amid unprecedented market conditions and other factors, “Ameritrade said in a statement.
Adena Friedman, CEO of the Nasdaq market, also pointed particular suggestions about how the exchange could suspend its commercial activities, alleging these actions to fear getting “attacked” by Internet users. The executive advocates an investigation so that all investors can “recalibrate.”
The primary regulator of securities in Massachusetts, William Galvin, also argued that the GameStop shares should be withdrawn from the market for 30 days since what happened has no “rational basis.” And he added: “This will probably hurt these small and unsophisticated investors.”
Blockades to Reverse the Situation and Do Damage Control
A big group of Reddit users brought Wall Street to its knees using Wall Street’s own rules and procedures, something that has escalated quickly once the pronouncements and actions from different companies appeared. The intention would be to reverse the situation and do damage control among institutional investors.
Another reactive behavior came from the chat service for video game players, Discord. The platform vetoed the server that supports the r / WallStreetBets subreddit. However, the company alleges that its decision does not relate to any of these recent events.
On January 28, an opinion article expressed that The Financial Times called on the Securities and Exchange Commission (SEC) to intervene and set a concrete definition to the borderlines between a legitimate discussion online and the prospects of a share of the abuse of the market.
The Financial Times text suffered later some modifications due to some delicate political themes regarding extremist political positions from some United States users.
By: Jenson Nuñez
