SINGAPORE (Reuters) – Online broker Robinhood has restricted trading with about 13 highly volatile stocks, such as GameStop and AMC Entertainment, to protect the company and its customers, CEO Vladimir Tenev said on Thursday.
The app, popular with young investors for its simplicity, was at the center of the daily trading craze, which followed calls on social media to buy shares sharply shortened by hedge funds. The restrictions allowed customers to sell, but not buy.
“We didn’t do this at all in the direction of any market maker or hedge fund … the reason we did it is that Robinhood, as a brokerage firm, has a lot of financial requirements,” Tenev told CNBC.
“In order to protect the company and protect our customers, we had to limit the purchase of these shares,” he said, adding that it was a “difficult decision.”
The company announced the restrictions earlier and raised the margin requirements, in a blog post that said the limited acquisition will be available on Friday. The move has angered angry customers and even politicians.
“We understand that our customers are upset, we are doing everything we can to reactivate the purchase in these names,” Tenev said.
“We want to be clear in our communications, and I know we should have been there a little earlier.”
Reporting by Tom Westbrook; Editing by Shri Navaratnam and Stephen Coates