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Robinhood Restricts Trading In GameStop, Drawing Criticism From Lawmakers
Robinhood and other major trading platforms on Thursday restricted trading in GameStop and other popular stocks that have skyrocketed this week and triggered anxiety on Wall Street. The decision sparked fierce backlash from smaller investors and lawmakers, questioning the legality of the restrictions.
In a statement, Robinhood said it was restricting transactions for certain securities to position closing only. Other trading platforms, including Investment Brokers and Charles Schwab, took similar steps to restrict trading. It s unclear how long the restrictions on each platform will last.
Smaller investors flocked to a Reddit discussion board, called Wallstreetbets, to encourage users to buy GameStop and other stocks to push prices up higher. In the past month, GameStop shares rose nearly 2,000%. But several hours after the Robinhood announcement, GameStop s shares were down 30%.