Report: Outraged Traders Have Been Besieging Robinhood’s Corporate Headquarters

Topline

A number of irritated Robinhood clients have traveled to the company’s California headquarters in recent weeks to personally voice their frustrations over the company’s decision to suspend or restrict trading on certain stocks last month, with a number of tense encounters including protests, vandalization, and even – in one case — the throwing of animal feces, according to police reports obtained by CNBC.

Key Facts

Key Background:

Robinhood has received intense backlash from the public since announcing in late January that it had restricted the trade of Gamestop, AMC and several other so-called meme stocks amid frantic exchanges. In the immediate aftermath, Robinhood CEO Vlad Tenev defended the decision by arguing the move was necessitated by the National Securities Clearing Corporation requesting the company put up $3 billion in collateral. Once the demand was reduced to $700 million, Robinhood reopened limited trading of the stocks. Earlier this week, the family of Alex Kearns, a 20-year-old college student who took his own life last June after he thought he’d lost $730,000 in a trade, filed a wrongful death lawsuit against Robinhood. The suit, filed in California state court, seeks unspecified damages, citing wrongful death, negligent infliction of emotional distress and unfair business practices. The complaint alleges that Kearns attempted to contact Robinhood’s customer service department three times the night of the trade and the next morning, requesting assistance. 

Tangent:

Robinhood is also facing a class-action lawsuit related to its restriction of meme stocks trading. “Robinhood knew its actions would result in the restricted stock prices to plummet,” reads the lawsuit filed by the Ferraro Law Firm. “By doing so, they were looking out for Wall Street hedge funds at the expense of the individuals who were customers of Robinhood.” 

What To Watch For:

After raising a total of $3.4 billion in late January and early February, Robinhood announced Thursday they plan to open offices in New York City and Seattle. In a blog post, the company says they “will build a center of excellence for infrastructure, security, and privacy to accelerate our investments in those areas.”

Crucial Quote: 

“I have money in my Robinhood account that I need for living expenses,” Rayz Rayl told CNBC in an interview outside of the company’s headquarters. “My money is currently held hostage by Robinhood, I can’t get it out.” 

Further Reading:

Robinhood Hit With Wrongful Death Suit From The Family Of Alex Kearns, Alleging Customer Service Failures And Reckless Practices (Forbes) 

Robinhood Is Down To 1 Star On Google’s Mobile App Store Again, This Time Google Won’t Intervene (Forbes) 

Robinhood CEO Dismisses Elon Musk’s ‘Conspiracy Theories’ About GameStop Trade Limits (Forbes) 

Angry customers show up at Robinhood’s headquarters in the wake of GameStop trading chaos (CNBC)