Suspension of trading on stocks through Robin Hood app raises serious questions - says professional body for IT
29 Jan 2021 03:19 PM
Amateur investors are outraged after the stock trading platform - Robin Hood - prevented them from buying shares in the US games firm - GameStop and other companies. The move has raised serious questions about the app and how it is being controlled.
Adam Leon Smith, Chair of the Software Testing Group at BCS, The Chartered Institute for IT commented: “Reddit users realised that hedge funds were buying short options in GameStop stock, artificially pushing down the price. When people on the internet started buying the undervalued stock, the hedge funds lost billions.
Many of these internet users are using Robin Hood, an amateur trading app offering commission free trading. Robin Hood responded by blocking users from buying or selling the stock, pushing the price back down.
This raises lots of questions about the app, why does it appear to have moved to protect billionaire hedge funds this week? Why are some users reporting that trades are apparently being delayed and executed in a way that maximises their losses? How is the app being funded and who controls it? Is user data being used to front run markets?
As regulators investigate - this may be revealed to be the latest example of how if the product is free, the user is the product.”