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Comment by skymast | Hacker News Reader

Why would anyone trust a financial institution with their money when they have acted like Robinhood as acted?

This is a fundamental question.

I closed my account with them during the GameStop debacle and never looked back. I wasn't trading GME but was appalled at their reaction.

what exactly were you appalled at?

Not parent, but I assume it's something in relation to https://www.cnbc.com/2021/06/30/robinhood-to-pay-70-million-...

This fine has nothing to do with the GameStop debacle.

They effectively told their users "you're being children, we know better than you".

I don't think Robinhood had any choice there. Trades don't settle instantly. Robinhood needs to post collateral with the Depository Trust & Clearing Corporation while settlement is pending, and the required collateral goes up with volatility. During the "GameStop debacle" they had to raise billions of USD in additional capital for this purpose, so no wonder they had to hit the brakes.

They could have frozen trades in both directions.

They could have... prevented users from exiting their positions? How would that be better?

In the context of what was happening in the market (the "short squeeze" that may or may not have ever happened), allowing sells but not buys clearly biased one position, could be seen as interference.

Blocking selling is a good way to get sued, so brokerages are very hesitant to do it. If the price drops the trader can claim they wanted to sell and are owed the difference. Blocking buying doesn’t have this issue since you can’t sue for theoretical gains.

I think you still can? But yeah probably much harder in court.

Robinhood is perfectly trustworthy with your money. This is a completely nonsensical smear.

You are the product for Robinhood, as they are selling deal flow. Vladimir Tenev will always put his customers first since they are paying for the deal flow information.

How can you trust any company that has you as the product?

You'll be shocked to learn that Robinhood also collects interest on your cash deposits and charges interest when you borrow money on margin. And gosh, other brokers like Fidelity also often route orders to Citadel. They're filling orders at the advertised prices, and following your limit price, are they not?

You could cry you don't like their prices or you think another broker offers better transaction costs, features, or fees, but talking about "trust" is a baseless smear.

They have the best recurring investment tool

Can anyone name a better one?

What about wealthfront?

Quick google says wealth front does not support it, this is what I am talking about:

https://robinhood.com/support/articles/2G77XtQsBQxJ9ofzqgJhA...

i think this has more to do with the market tanking. nobody wants to log on to a sea of red. robinhood didn't start doing anything new as of september to drive people off.

3% interest

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