Robinhood, the buying and selling app fashionable with younger traders, might have higher defined why it restricted the shopping for of closely shorted shares caught up within the social media-fueled trading frenzy around GameStop Corp, stated the corporate’s chief govt officer.

“Little question we might have communicated this a little bit bit higher to clients,” CEO Vlad Tenev stated late Friday on the All-In Podcast, the hosts of which embrace Chamath Palihapitiya, who had strongly criticized Robinhood over the buying and selling restrictions, and Jason Calacanis, a Robinhood investor.

Tenev’s feedback got here forward of his scheduled Feb. 18 U.S. Home Monetary Providers Committee testimony concerning the buying and selling turmoil and Robinhood’s function in it. The CEOs of Citadel Securities, Melvin Capital and Reddit may also testify.

Robinhood didn’t reply to a request for remark.

Robinhood outraged lots of its clients when on Jan. 28 it restricted the shopping for of 13 closely shorted shares that had been pushed to report highs, together with GameStop, whose shares had surged greater than 1,600%.

The strikes have been due partly to retail traders coordinating on websites like Reddit’s WallStreetBets to drive costs greater and power hedge funds like Melvin to unwind their bearish positions. A number of different brokers additionally restricted buying and selling within the shares.

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Tenev stated the restrictions have been crucial resulting from a big improve in deposit necessities by a post-trade regulator, however that was not spelled out in automated emails despatched to Robinhood clients early on Jan. 28.

“As quickly as these emails went out, the conspiracy theories began coming, so my cellphone was blowing up with, ‘how might you do that, how might you be on the facet of the hedge funds,'” he stated.

“We most likely might have provided extra element into that with the foresight that possibly clients would assume {that a} hedge fund compelled us to do it,” he later stated.

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