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