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Texas Attorney General Probing Online Sites Over Limiting Services Amid GameStop Frenzy

Feb 01, 2021

Washington (United States of America), February 01: Texas Attorney General Ken Paxton is investigating several online trading platforms, including Robinhood, after users were limited access to the stock market amid the GameStop frenzy, his office said on Friday.
"Attorney General Ken Paxton today issued 13 Civil Investigative Demands (CIDs) to Discord, Robinhood Financial, Robinhood Markets, Robinhood Securities, Interactive Brokers, TD Ameritrade, TD Bank, E-Trade, WeBull Financial, Public Holdings, M1 Holdings, Citadel Financial, and Apex Clearing Corporation, regarding the prohibition of certain stock purchases, requiring higher margin reserves for trading certain companies, and suspending chat platform activity," Paxton's office said in a press release.
Small market participants have pushed shares of underperforming companies - GameStop, AMC or BlackBerry - to historic highs in a drive that some suggest is mobilized and coordinated via social media platforms like Reddit. The rally resulted in multibillion losses for hedge funds, who bet on the continued slump of the reenergized shares.
Online broker Robinhood caused a major uproar by prohibiting small investors' operations with stocks affected by the frenzy. It later eased restrictions, but still does not not allow purchases of fractional shares in GameStop and dozen of other companies.
Earlier this week, a Discord server used by the WallStreetBets community, a Reddit forum for retail traders and those discussing the populist-driven surge in Gamestop stocks, was banned, with Discord alleging that it contained "hate speech."
Source: Sputnik