SINGAPORE (Reuters) - Online broker Robinhood restricted trade in 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 heart of the day-trading mania that has followed calls on social media to buy stocks heavily shorted by hedge funds. The restrictions allowed customers to sell but not buy.
“We absolutely did not do this at the direction of any market maker or hedge fund ... the reason we did it is because Robinhood as a brokerage firm, we have lots of financial requirements,” Tenev said on CNBC.
“In order to protect the firm and protect our customers, we had to limit buying in these stocks,” he said, adding it was a “difficult decision”.
The company had earlier announced the restrictions, and raised margin requirements, in a blog post which said limited buying would be available on Friday. The move has drawn the ire of angry customers and even politicians.
“We understand our customers are upset, we’re doing what we can to re-enable buying in these names,” Tenev said.
“We want to be clear in the communications, and I own that we should have been out there a little bit sooner.”
Reporting by Tom Westbrook; Editing by Shri Navaratnam and Stephen Coates
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