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Robinhood CEO accused of ‘mendacity’ on CNN after claiming he halted inventory purchases to stick to obscure ‘regulatory necessities’
Robinhood CEO Vlad Tenev is going through a heavy backlash after he tried to defend his buying and selling app’s determination to cease customers from shopping for sure shares, claiming it had “no selection.”
Tenev was interrogated by CNN’s Chris Cuomo on Thursday amid the Robinhood-GameStop shares controversy, with the CEO claiming his determination was made to stick to obscure “regulatory necessities” and to not shield rich hedge funds that had been shorting the shares.
After Cuomo highlighted the irony of the corporate being known as Robinhood – a legendary outlaw who stole from the wealthy to offer to the poor – when the corporate of the identical identify seems to be “doing precisely the alternative,” Tenev insisted: “That’s not what it’s in any respect… We needed to make a really tough determination to guard our prospects and our agency.”
When Cuomo referenced Robinhood’s connections with Citadel Securities, a agency that facilitates trades on the app and that bailed out Melvin Capital, the hedge fund focused by the Redditors, Tenev maintained its relationships with some other firm had “nothing to do with” its determination to halt buying and selling.
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“Robinhood, as a brokerage, has a lot of monetary necessities, SEC [the US Securities and Exchange Commission] necessities,” Tenev mentioned, although Cuomo shot again that the SEC “hasn’t mentioned you had to do that.”
The important thing second is when Cuomo says "The SEC didn't say you needed to this." That's the entire recreation proper there. And that's precisely the place Vlad begins stuttering and searching additional uncomfortable. 1/x
— Mr. Johnnie (@MrJoneV) January 29, 2021
Tenev concluded by denying that Robinhood took motion on the orders of some other market entity, and once more blamed the choice on unspecified necessities.
Viewers weren’t satisfied by Tenev’s excuses, nevertheless, lambasting the CEO in CNN’s YouTube feedback, with some accusing him of “mendacity” and “dodging each single query.”
We proactively stopped our purchasers from shopping for proper after they had been about to squeeze our investor for billions, however it's not associated. ?
— Eammon Atkinson (@EammonAtkinson) January 29, 2021
“In fact he did precisely what his company overlords wished. He’s no completely different than some other hedge fund douche,” one consumer recommended, whereas one other known as Tenev’s story about regulatory “necessities” a “BS reply.”
On Twitter, others requested Tenev to quote any regulation that required him to halt buying and selling on the shares. One other mentioned he seemed “unprepared” and mistakenly thought he might “phrase salad” his means out of it.
Robinhood prohibited its customers this week from shopping for shares in quite a few firms, together with GameStop, Nokia, and BlackBerry, after they’d been invested in by a gaggle of novice merchants, leading to billions of value of losses for Wall Road hedge fund short-sellers.
A number of members of Congress, together with Sen. Ted Cruz (R-TX), Rep. Rashida Tlaib (D-MI 13th District), and Rep. Alexandria Ocasio-Cortez (D-NY 14th District), have publicly known as for an official listening to over Robinhood’s actions.
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