Robinhood CEO Vlad Tenev said the investment app could have explained more clearly why it had to block GameStop operations and other actions during the Reddit-fueled market frenzy last month.
“I think the challenge was that we could certainly have communicated this a little better to customers,” Tenev said in a recent episode of the funding-focused “All-In” podcast.
Admission came ahead of Tenev’s appearance at a hearing in Congress on Thursday, where lawmakers will investigate the unprecedented January increase in GameStop shares.
Robinhood’s decision to temporarily block retailers from buying GameStop and others
“Meme actions” like the AMC Entertainment movie chain sparked widespread outrage amid a populist market insurgency led by Reddit’s WallStreetBets forum. The message board had been accumulating these actions in an effort to squeeze the hedge funds that were betting against them.
Robinhood communicated the move to its users with automated emails that simply said they were banned from buying certain shares, according to Tenev.
He said the messages should have included more information to end allegations that Robinhood was acting on hedge fund instances that were receiving a blow from the explosion of GameStop shares. Tenev denied that hedge funds played a role in the firm’s decision to limit trading.
“As soon as these emails came out, conspiracy theories immediately started popping up, so my phone was exploding with‘ How could you do that, how could you be next to hedge funds? Tenev said on Friday’s episode of the podcast, whose hosts include venture capitalist Chamath Palihapitiya and Robinhood investor Jason Calacanis.
“We probably could have offered more details on this with the forecast that maybe customers would think that a hedge fund would force us to do that or something,” he added.
As he first revealed earlier this month, Tenev said Robinhood had to restrict trade because a Wall Street clearing center called National Securities Clearing Corporation asked the company for a deposit of about $ 3 billion. amid massive demand for GameStop shares.
Tenev is scheduled to appear at the House Financial Services Committee hearing Thursday alongside the head of the citadel, Ken Griffin, Reddit CEO Steve Huffman, and Keith Gill, the Reddit user has attributed the provocation to the GameStop rally to him.