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Society & Culture
Virtual Legality Episode 402

Robinhood Restricts Trading in GameStop (and more) - Can They Do That?

4
345 345 views
5m Jan 28, 2021
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With GameStop stock on 2021's craziest roller coaster ride (...yet), brokers, exchanges, and regulators across the country are all trying to figure out what, if anything, should be done about it.

But what happens when your entire business model is premised around facilitating retail investment? Of "democratizing" the market?

Ultra-popular trading app Robinhood is finding out how it feels to be stuck between a rock and a hard place.

There's nothing more scary than "it's for your own good"...in Virtual Legality.

#GameStop #Stock #Robinhood


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Discussed in this episode:

"It appears Robinhood has stopped letting people trade GME..."
Tweet - January 28, 2021 - The One True Mango
https://twitter.com/theonetruemango/status/1354782911178940417

"Robinhood reportedly locking out traders from GameStop, AMC, Nokia and others"
Seeking Alpha - January 28, 2021
https://seekingalpha.com/news/3655535-watch-gamestop-amc-as-robinhood-reportedly-locking-out-traders

"Keeping Customers Informed Through Market Volatility"
Robinhood Blog - January 28, 2021
https://blog.robinhood.com/

Robinhood Customer Agreement
Updated June 22, 2020
https://cdn.robinhood.com/assets/robinhood/legal/Customer Agreement.pdf

"What We Do"
SEC Webpage
https://www.sec.gov/about/what-we-do

"Protecting the Retail Investor"
SEC Speech - March 21, 2014
https://www.sec.gov/news/speech/mjw-speech-032114-protecting-retail-investor

"Power to the Players: Reddit and the GameStop Stock Explosion (VL398)"
YouTube Video - January 25, 2021 - Hoeg Law
https://youtu.be/TjiurSx42yA

"GameStop - "WallStreetBets" Booted by Discord, (Briefly) Reddit Private (VL401)"
YouTube Video - January 27, 2021 - Hoeg Law
https://youtu.be/OSVVJVm8IIE

Regulation D Offerings
SEC's "Investor" Webpage
https://www.investor.gov/introduction-investing/investing-basics/glossary/regulation-d-offerings

"Capital Raising in the U.S...."
SEC Report - August 2018
https://www.sec.gov/files/DERA white paper_Regulation D_082018.pdf

Rule 506 of Regulation D
SEC's "Investor" Webpage
https://www.investor.gov/introduction-investing/investing-basics/glossary/rule-506-regulation-d

"Definitions and terms used in Regulation D"
17 CFR 230.501
https://www.law.cornell.edu/cfr/text/17/230.501

"Online trading platforms see a surge in usage as Redditors take on Wall Street"
CNBC - January 27, 2021
https://www.cnbc.com/2021/01/27/online-trading-app-usage-surges-as-redditors-take-on-wall-street.html

"Wall Street, Big Tech Clamp Down on GameStop-Style Pumps; Biden Admin ‘Monitoring’ Situation"
CoinDesk - January 27, 2021
https://www.coindesk.com/gamestop-equity-markets-trading-halted-nasdaq


"Virtual Legality" is a continuing series discussing the law, video games, software, and everything digital, hosted by Richard Hoeg, of the Hoeg Law Business Law Firm (Hoeg Law).

CHECK OUT THE REST OF VIRTUAL LEGALITY HERE:
https://www.youtube.com/playlist?list=PL1zDCgJzZUy9YAU61GoW-00K0TJOGnPCo

DISCUSSION IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TO BE CONSTRUED AS LEGAL ADVICE. INDIVIDUALS INTERESTED IN THE LEGAL TOPICS DISCUSSED IN THIS VIDEO SHOULD CONSULT WITH THEIR OWN COUNSEL.


DESIGN WORK
Joe Ellis (Logo Design)
Chris Leroux (Motion Graphics)
For more information: contact Chris at @Chrisleroux on Twitter.

PODCAST VERSIONS ALSO AVAILABLE

Table of Contents

Timecode Title
0:00 Introduction
2:01 Robinhood and its Customer Agreement
10:04 What is the Purpose of the SEC?
14:05 Regulation D and Accredited Investors - A Case Study
23:43 Conclusion - A Rock and a Hard Place

About Hoeg Law

The Hoeg Law Firm is a business law firm with big law experience and a small firm approach focusing on start-ups, technology, financing, and everything else a business might need.


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