![]() It's the same moral hazard that undergirded the 2008 financial crisis: a relatively small group of people are making big bets, but if they go wrong, they don't lose. They knew the rules and the risk, and rather than accept the outcome, the financial bigwigs are pulling strings to change those rules and avoid the consequences of their own actions. These supposedly savvy market players-including Gabe Plotkin, the hedge-fund wunderkind who manages Melvin Capital, which got absolutely hosed-took a big bet and lost. The math isn't complicated here, and the revulsion at all this has consumed a remarkable span of the political spectrum. ![]() GameStop shares fell 60 percent following Robinhood's ban. So in response to "market volatility," they did not halt trading altogether-as happens all the time-but merely halted trading that would hurt insiders in the financial-services industry. Meanwhile, because Robinhood makes trading stocks free for you and me, it actually makes money through fees from insiders in the financial-services industry. "Our mission at Robinhood is to democratize finance for all," they said, with or without a straight face. But no, Robinhood said in a press release, addressing their everyday retail investors, we did this for your own good. ![]() To the layman, this might look like blatant market manipulation to benefit powerful interests in the financial-services industry. But Robinhood will still allow you to close out your position-to sell these stocks-which would, of course, be to the benefit of The Stonk Men. So this morning, Robinhood (and other brokerages like TD Ameritrade) banned users from buying those stocks. One of these poor hedge funds had to seek a bailout from another hedge fund. They bet the stock would go down, and when it went up, they started to lose a lot of money. When those stocks went up big this week, thanks to a surge of interest generated on Reddit-a phenomenon that does not, at this point, seem to have been illegal-some of these hedge-fund types lost their shirts. The big one is GameStop, but there's also Blackberry, AMC, Express, Bed Bath and Beyond, and Nokia. Well, certain stocks-the ones that some rich and powerful people bet against. “There are very sophisticated actors looking for information.Robinhood is, as of Thursday morning, a stock-trading app in which you are not allowed to buy stocks. “The more people are aware that it could happen anywhere in the organization, the better,” she said. In July 2020, for instance, hackers manipulated several popular Twitter accounts, including those of Joe Biden, Elon Musk and Jeff Bezos, and used information to target employees with access to account-support tools.įinancial firms should stay on alert for vulnerabilities in every department, said Joanna Fields, founding principal at consultancy Aplomb Strategies. Other technology companies have fallen victim to vishing attacks. ![]() Also among the stolen valuables: photo ID information for fewer than 10 customers, according to the firm. The hackers walked off with thousands of phone numbers and millions of email address - details criminals can use to induce people via phishing emails to reveal still more personal information, such as passwords and credit-card numbers. “Robinhood has this situation where they’re always in a crisis six-to-18 months ahead of where their operations are,” said Mazi Bahadori, chief compliance officer at Altruist Corp., an investment platform for financial advisers.
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