Photo: Robinhood
Robinhood CEO and co-founder, Vlad Tenev, came under fire last week, following added restrictions to users’ abilities to purchase Gamestop (GME) and AMC (AMC) shares on the stock trading platform.
Following the controversy, which caught the attention of Congress members Alexandria Ocasio-Cortez and Ted Cruz, among a number of other politicians and celebrities, Tesla CEO Elon Musk grilled Tenev on Sunday night’s session on audio app Clubhouse, according to CNBC.
“This has been a very surreal weekend and week for me.” — Vlad Tenev, the CEO of Robinhood, to Elon Musk on Clubhouse
— Michael de la Merced (@m_delamerced) February 1, 2021
In the conversation, Tenev told Musk that the company didn’t have an option but to restrict individual and retail stock traders, who were prevented from buying any more of shares from stocks considered volatile, like Gamestop (GME) and AMC, which have climbed significantly since the beginning of the year.
Tenev claims the restrictions were put in place following a requested $3 billion security deposit from the National Securities Clearing Corporation (NSCC), which was later reduced to just $1.4 billion.
Musk asked, “Did something maybe shady go down here?”
Tenev responded, “I wouldn’t impute shadiness to it or anything like that. The NSCC was reasonable subsequent to this.” Tenev continued, ”We had no choice in this case. We had to conform to our regulatory capital requirements.”
The Robinhood CEO went on to defend himself against rumors of foul play with its major investor, Citadel Securities, who also, in part, funds Melvin Capital, the victim hedge fund of Wall Street Bets’ shortest-squeeze on Gamestop’s (GME) stock.
Head to the 4-minute mark below to hear Musk lay into Tenev:
https://youtu.be/GIom9h6tOJU
“To what degree are you beholden to Citadel?” probed Musk, to which Tenev replied: “There is a rumor that Citadel or other market makers pressured us into doing this and that’s just false.”
Tenev further clarified, “This was a clearinghouse decision and it was just based on the capital requirements. From our perspective, Citadel and other market makers weren’t involved in that.”
