And the question will be posed if making it an absolute certainty that your customers lose value is a justified action because it reduces volatility. And RH will have a tough time arguing. “Yes, yesterday you had 2mil but you didn’t know if it would double or halve. Today you know for sure that you have 100k, so why aren’t you happy? I’m just looking out for your best interests!”
> They let their customers sell which was probably a fiduciary responsibility.
Given the context of gamestop's stock, only allowing to sell stocks is the exact opposite of protecting the customer's best interests.
I mean, the high demand for gamestop's stock was motivated by the rally behind a retail-backed short squeeze, where hedge funds were reported to have massively shorted gamestop's stocks. Barring customers from buying more gamestop stocks meant they were unable to strengthen their positions and thus profit from the short squeeze,and pushing them to sell represented a pressure to kill off the short squeeze, thus acting on the exact opposite of their customer's best interests.
Then there's the reported news that one of RobinHood's new backers ends up being one of the hedge funds that stood to loose massively due to this retail-backed short squeeze.
> Rh will argue best financiary duty was to protect his customers from the volatility
Wouldn't that line of argument determine that traders would have the fiduciary duty to only allow their clients to sell on price hikes and buy on price drops?
Because otherwise that line of reasoning is highly arbitrary in the sense of what RobinHood claims is in the best interests of his customer, and thus very unlike anything regarding fiduciary responsibility.
