Alright, I kind of avoided getting into this, but here goes. I don’t think Robin Hood had a choice in the halts today. These brokerages all have a custodian and if the custodian says “no more”, that’s it. So for example, if they have $5bn in margin and a whack of that is GME, the custodian won’t let that run forever. So, that’s the first thing. There’s no real option here for RH or IB to do much though.
And second, I read the user agreement and section 16 explicitly says that RH can halt trades and take these actions. I’m sure that almost no one else read that, and I get it, but the fact is these users signed off on this. I see the calls for a congressional hearing and all that, and I know there’s a class action as well. I’m not a lawyer and who knows, but it seems pretty cut and dried. It’s in the agreement, the users signed it, and while it sucks, that’s the purpose of those agreements.
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