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Friday, January 29, 2021

Breaking Robinhood

The GameStop investors will be able to go all Sheriff of Nottingham and easily bury Robinhood in arbitration if they wish, as it has the same insanely stupid ban on class arbitration incorporated into its terms of use that many tech firms do. Note that JAMS used to wisely mandate a class arbitration clause in its rules, but removed it in 2005 because the idiot tech corporations didn't want to risk losing in arbitration to all their users if they did something shady. Instead, the technocracy forced a system on everyone that can quite literally bankrupt them in order to save a little on potential litigation fees. The stupidity is epic-class.

38. Arbitration.

A. This Agreement contains a pre-dispute arbitration clause. By signing an arbitration agreement, the parties agree as follows: (1) All parties to this Agreement are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed. (2) Arbitration awards are generally final and binding; a party's ability to have a court reverse or modify an arbitration award is very limited. (3) The ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings. (4) The arbitrators do not have to explain the reason(s) for their award unless, in an eligible case, a joint request for an explained decision has been submitted by all parties to the panel at least 20 days prior to the first scheduled hearing date. (5) The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. (6) The rules of some arbitration forums may impose time limits for bringing a claim in arbitration. In some cases, a claim that is ineligible for arbitration may be brought in court. (7) The rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Agreement. B. Any controversy or claim arising out of or relating to this Agreement, any other agreement between Me and Robinhood, any Account(s) established hereunder, any transaction therein, shall be settled by arbitration in accordance with the rules of FINRA Dispute Resolution, Inc. ("FINRA DR"). I agree to arbitrate any controversy or claim before FINRA DR in the State of California. C. This agreement to arbitrate constitutes a waiver of the right to seek a judicial forum unless such a waiver would be void under the federal securities laws. If I am a foreign national, non-resident alien, or if I do not reside in the United States, I agree to waive My right to file an action against Robinhood in any foreign venue. D. No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action; or who is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (1) the class certification is denied; or (2) the class is decertified; or (3) the customer is excluded from the class by the court. Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Agreement except to the extent stated herein.

Two observations:

  • Unlike AAA, FINRA has no rule allowing an arbitrator to declare an arbitration to be "frivolous", and furthermore, the right to file even frivolous arbitrations is protected by the Federal Arbitration Act and the Supreme Court rulings Steelworkers and Schein.
  • Robinhood's terms of use specify California law. CCP Section 1284.3 prevents any consumer from being charged anything for an arbitration proceeding beyond the initial filing fee. "No neutral arbitrator or private arbitration company shall administer a consumer arbitration under any agreement or rule requiring that a consumer who is a party to the arbitration pay the fees and costs incurred by an opposing party if the consumer does not prevail in the arbitration, including, but not limited to, the fees and costs of the arbitrator, provider organization, attorney, or witnesses."
If this sounds like a foreign language to you, I strongly suggest reading Corporate Cancer, particularly chapters 8-10.
The Ride Never Ends.

Labels: , ,

56 Comments:

Blogger [Redacted] January 29, 2021 8:08 AM  

[Consumer Revolt INTENSIFIES]
[Memorable chord progression of an anime battle theme foreshadows ominously in the distance]

Blogger Br1cht January 29, 2021 8:09 AM  

The SDL striketh.

Blogger pyrrhus January 29, 2021 8:11 AM  

The stupid, it burns....Meanwhile, Xiden has purportedly banned the term "China virus."

Blogger Bernard Korzeniewicz January 29, 2021 8:25 AM  

By connecting the arbitration to the Wall Street our SDL sends the law piranhas against the bank's hyenas.

The retired judges may have an occasion to do good by getting obscenly rich in the procces.

What next? The SDL succesfully suing Sauron for defamination of the Dark Lords (R) everywhere?

Blogger metris January 29, 2021 8:28 AM  

Someone should make the redditards aware of this. To the moooooon!🚀🚀🚀🚀🛸

Blogger David January 29, 2021 8:34 AM  

I've enjoyed using Robinhood because they don't charge all the (fees) other places did, and basically forced some of the big players to also stop charging fees. But, their one-day capitulation to higher powers (yes, less than 24 hours later they said they'd start allowing trades again) will almost certainly destroy them. Good riddance to those who don't stand firm.

Blogger Faramir January 29, 2021 8:35 AM  

Anti-fee shifting statute applying to arbitration—heh heh, that's amusing. Negates the shifting of enormous fees generated by corporate lawyers to consumers challenging a corporate practice. But it does seem that law doesn't prohibit agreements that shift the consumer's fees to the corporation, which raises an Equal Protection question (it looks a lot like a pretty old SCOTUS precedent that struck down a similar Texas law back in the early 1900s)—but then again, I suppose a corporation will never have standing to raise such a challenge because it will never write such a fee shifting provision into its arbitration contract.

The [I]Schein[/I] case presented a great critique of the "wholly groundless" exception. Looks like Robinhood will get gigged in arbitration here some time soon, too.

Blogger RC January 29, 2021 8:41 AM  

WSB needs a consumer advocate to lead them.

Blogger FALPhil January 29, 2021 8:42 AM  

It will be interesting to see how much exposure RH tries to put under the regulatory risk management category vs. the fiscal risk category. IIRC, there is some weasel language in the SEC regulations they could take advantage of. But, it has been a long time since I looked at it.

Blogger Nate January 29, 2021 8:48 AM  

my own thinking is that Robinhood is already dead. They were working on an IPO... and it was going to be huge. Hell the Retards were planning on yoloing it. But now? They threw that away... and I would argue they did so knowingly.

Vlad is a lot of things but he is neither stupid nor suicidal. He knew he was effectively destroying Robinhood when he cut off GME and the others yesterday. He did so because someone up the food chain guaranteed him they would buy Robinhood for some stupid amount of cash to bail him out.

Blogger T.L. Ciottoli January 29, 2021 9:05 AM  

Next: The Legal Tender law.

I realized 15 years ago that conservatives had not teeth when I kept asking why they don't go after the Federal Reserve or Legal Tender laws which protect the (((dollar))) system.

All this is only a flash in the pan unless the dollar comes down and brings the (((Federal Reserve))) with it.

Israelis have no right to rule over us, economically, financially, or otherwise.

Blogger Krymneth January 29, 2021 9:13 AM  

What arbiter could rule this amount of money in arbitration frivolous anyhow? There are people who have hundreds of thousands to millions of dollars worth of complaint when Robin Hood forcibly liquidated their position.

(Arbitrations about not being allowed to join in may be more "frivolous", but there's still plenty of people with very clear claims here. But there's also many more people who can probably make the claim that they were denied service aribtrarily.)

I'm still trying to get a full bead on whether or not they were all margin calls. Margin calls have some validity to them, and there's clearly some people who didn't understand what those were until they happened to them. But there are certainly a number of people who think they got forcibly liquidated when they were not trading on margin at all, and those people have a very clear cause of action if they are correct this was not a margin call. (I'm not predicting whether or not they'll win, just that they have a very clear cause.)

It looks like there is no particular limit on the size of claim you can file: FINRA section 12401. At $100K+, Robinhood is automatically paying a three-arbiter board.

Something else that may be useful to humbly consumer advocate for (though I ask this of anyone who can answer, not directly asking Vox alone) is giving some guidance on where to find lawyers who may be able to provide good help with this arbitration. Many of the people who may have $100K+ in claims still ended up with hundreds of thousands even so in their forced liquidations, and thus, they have money to get professional help with this arbitration. They may choose to "invest" some of this in their arbitration battles.

Blogger Delaware Blue Hen January 29, 2021 9:13 AM  

The Reddit Raiders and the Legal Legion appear to have a lot in common--both of them are unorthodox and are spoiling for a fight. Maybe the Legion should consider giving the Raiders some helpful tips on dealing with the possible arbitration fight with Robinhood.

Blogger Seth S January 29, 2021 9:15 AM  

They have a post on Wallstreet bets pumping silver, specifically symbol AG. If these guys go after silver they could really break the banks..
https://www.reddit.com/r/wallstreetbets/comments/l68ill/the_biggest_short_squeeze_in_the_world_slv_silver/

Blogger The Lab Manager January 29, 2021 9:15 AM  

T.L. Ciottoli wrote:
Israelis have no right to rule over us, economically, financially, or otherwise.


What?!?! That's not what the Talmud says.

Blogger Skybraker88 January 29, 2021 9:29 AM  

Guren no yumiya by Linked Horizon would do quite wonderfully.

Blogger pyrrhus January 29, 2021 9:29 AM  

Now I see that RH was actually SELLING account positions without authorization, and that it just borrowed $1 billion....that might not be enough...

Blogger pyrrhus January 29, 2021 9:37 AM  

@10. It makes no sense...what could possibly induce RH to blow up the IPO and destroy itself, at a cost of billions?

Blogger Nate January 29, 2021 9:41 AM  

"WSB needs a consumer advocate to lead them."

I am the leader of WSB and so can you.

Blogger Joeplanet January 29, 2021 9:42 AM  

Seriously, share this post far and wide. I have been. Make the rubble bounce and reach critical mass.

Blogger James Dixon January 29, 2021 9:49 AM  

> I've enjoyed using Robinhood because they don't charge all the (fees) other places did

Most of the major brokerages have free trades now. Schwab dropped commissions back in Oct. 2019.

Blogger Josh January 29, 2021 9:50 AM  

Does this feel like the beginning of the end of the dollar to anyone else? Dollar/Wall Street crashes, crypto ‘saves’ the day?

Blogger Auchino January 29, 2021 9:51 AM  

Someone make Louis Rossmann awere of this.

Blogger Doktor Jeep January 29, 2021 9:53 AM  

Are the investor bros aware of this? This is going to be ring of doom in the lava level.

Blogger Imwill January 29, 2021 10:01 AM  

It’s a... GUNDAM!!!

Blogger Ray - SoCal January 29, 2021 10:13 AM  

Nice public service message!

Blogger Cappuccinobear January 29, 2021 10:51 AM  

When productive society retires or shrinks down to just a few, these hedge fund issues will look like the good old times.
All these tik tok, youtube, and onlyfans "stars" will be the majority of the "productive" population very very soon.
The house isn't just about to collapse, its about to be swallowed by a sinkhole the size of North America.

Blogger Nate January 29, 2021 10:59 AM  

"It makes no sense...what could possibly induce RH to blow up the IPO and destroy itself, at a cost of billions?"

Pretty simple... the boss made an offer Vlad could not refuse.

Blogger MATT January 29, 2021 11:00 AM  

So pissed at myself for stupidly not getting on 2 says earlier. Id be up 20k

Blogger Crunchy Cachalot January 29, 2021 11:00 AM  

He did so because someone up the food chain guaranteed him they would buy Robinhood for some stupid amount of cash to bail him out.

He hardly even needs that. Nobody at any corporation, even the founders and board, have any actual liability, criminal or otherwise, so what're they gonna do, impeach him? Certainly no fruit of the poisonous Obama tree is going to move against the moneylenders.

Ol' Vlad can and very likely will just set up shop somewhere else and the same grifters and shit weasels will pile in.

Blogger Maniac January 29, 2021 11:07 AM  

@23 - He's already made a couple of videos about it.

Any suggestions on where to invest a grand or so? I imagine that this is a trend that will continue for a while.

Blogger OneWingedShark January 29, 2021 11:33 AM  

pyrrhus wrote:@10. It makes no sense...what could possibly induce RH to blow up the IPO and destroy itself, at a cost of billions?
Melvin Capital shorted more stock than exists on the public market, this is key to understand.
Once the potential loss exceeds what the hedge fund can pay, it rolls up to the investment banks (I think there's an intervening step, the market-makers, but it's irrelevant), and because the Banks are so overleveraged they won't be able to fulfil the contractual obligation to buy the stock, sot THEY will go down too.
IOW: Some idiots opened themselves to INFINITE LOSSES!!, and all /r/WSB and the Autists have to do is NEVER SELL, ONLY BUY! SEND THE PRICE EVER HIGHER!
(And laugh. Never forget to have fun playing your games.)

Blogger Helldozer January 29, 2021 11:47 AM  

I passed this along to the mods of WSB reddit. We will see if they notice or act.

Blogger FALPhil January 29, 2021 11:51 AM  

Seth S wrote:They have a post on Wallstreet bets pumping silver, specifically symbol AG. If these guys go after silver they could really break the banks..


WSB was kind of slow on that one. First thing I did yesterday when I saw the short squeeze story was take a position in AG.A good rule to follow when market chaos occurs, precious metals can be a leveler for the retail account.

Blogger Karen took the Kids January 29, 2021 12:22 PM  

They definitely do not. That's suicide.

Blogger Arthur Isaac January 29, 2021 12:32 PM  

@Seth, Already in USAS. I think I'll ride it put there.

Blogger MidnightSun January 29, 2021 12:33 PM  

Vlad has been entrenched since birth with both parents working for the World Bank which is an institution of the United Nations. Vlad's 'bosses' are the very globalists that caused the mess we live in today. There is much more to this story than meets the eye. Robin Hood? Ha. More like Dr No.

Blogger RealTalk103 January 29, 2021 12:37 PM  

Hello everyone, I'd like to participate. Does anyone know who is organizing arbitration?

Blogger Test 1 2 3 January 29, 2021 12:38 PM  

GameStop or GameOn?

Silver volume up

Average Daily Vol 28.13M

Jan 29. Vol. 138.66M

https://www.jsmineset.com/2021/01/29/gamestop-or-gameon/

Blogger Tommy Hass January 29, 2021 12:50 PM  

https://m.youtube.com/watch?v=UMaQh-2gGt4

Not anime, technically, but still.

Blogger LaMachinna January 29, 2021 12:56 PM  

https://www.theblaze.com/op-ed/horowitz-the-robinhood-gamestop-scandal-lockdowns-and-a-two-tiered-justice-system

Blogger Kelly January 29, 2021 1:07 PM  

I became obsessed with the GameStop thing a few days ago, and have felt inspired by the rage and "this is for 2008" comments on Reddit because I'm still salty myself over 2008. I'm a young Gen-Xer born in 1979, and it has always appeared to be a rigged game to me.


I want to refresh my memory about 2008 and how it all went down. Does anyone here recommend a book or longform articles about it?

Blogger TW9 January 29, 2021 1:55 PM  

Sometimes the house lets people win to encourage more marks to play.

And, like they'd really let this leak out when nothing else has?

Blogger eclecticmn January 29, 2021 3:19 PM  


Liberal Matt Taibbi reports on how the big banks had the govt outlaw short selling certain companies around 2008 because most of the banks were not worth much.

https://taibbi.substack.com/p/suck-it-wall-street?
Suck It, Wall Street
In a blowout comedy for the ages, finance pirates take it up the clacker
Matt Taibbi

Blogger liberranter January 29, 2021 3:34 PM  

Apologies in advance if this has already been posted:

https://charleshughsmith.blogspot.com/2021/01/the-democratization-demonization-of.html

Blogger Dafo January 29, 2021 4:16 PM  

Heh, are any Bears also Robinhood investors by chance?

Blogger WRT January 29, 2021 5:49 PM  

I can’t help but laugh that the acronym for California Civil Procedure and/or California Consumer protection is “CCP”

Blogger LaMachinna January 29, 2021 6:26 PM  

Popular meme going around today....

These hedge fund CEO's who lost billions need help...I SUGGEST $600 bahahah

Blogger Pat V January 29, 2021 6:34 PM  

If we wanna push further, we need to name the Jew. Reason why Wall Street, Big Media, and Big Tech get away with so much bad shit is they are run by Jews. Jews are holy, and any noticing of Jewish corruption is condemned as 'antisemitic'. Money rigging is downstream from Moral rigging.

Blogger Didas Kalos January 29, 2021 7:43 PM  

in case no one has posted this yet.

https://gab.com/JohnnyAmerica/posts/105641792600968333

Blogger Avalanche January 29, 2021 10:58 PM  

@18 "It makes no sense...what could possibly induce RH to blow up the IPO and destroy itself, at a cost of billions?"

Panic? Sheer flopsweat panic?

Blogger Avalanche January 29, 2021 11:04 PM  

@22 "crypto ‘saves’ the day?"

And if (when?) the internet DOES "go dark" -- either by human intention or by a solar CME? What "savings account" is there for you now? How will you buy groceries with electronic money you CANNOT REACH?! Pay for gasoline, if the station only takes fiat? Pay the doctor for your child by shaving off chips of gold from your precious metals stash if you have one, and IF he takes it??

Have you never lived through a bad hurricane? It may be to great idea for AS LONG AS the internet where it resides stays 'up' and you cryptos mostly buy online... but what about when there IS no online?

Blogger Avalanche January 29, 2021 11:57 PM  

Can this be real!? (Don't be drinkin' when you click: you'll baptize your screen!)

https://media.gab.com/system/media_attachments/files/063/693/056/original/819d1db787e03866.png

Blogger Phillip McOntoll January 30, 2021 12:56 AM  

If you know what how execution operated you would realize that Robinhood is not only not free, it can cost significantly more than its competitors. Basic rule of economics; there's no such thing as free lunch.

Blogger Tommy Hass January 30, 2021 4:23 AM  

......

Blogger Gettimothy January 30, 2021 12:48 PM  

Heh.

RobinHood wants me to complete my sign up process!
From their email...

Learn what we’re all about
Hi Timothy,

Welcome to Robinhood—we’re so glad you’re here. This past week has truly shaken up the financial industry, and we recognize that times of uncertainty can be difficult to navigate. You can read more about what happened in our blog post. Rest assured our position stands firm—we stand with our customers and will continue to provide you with the resources and tools you need to become a confident, informed investor....


Two things.

1. The link to their blog post is

https://blog.robinhood.com/news/2021/1/29/what-happened-this-week

2. They keep using the term "investor" ; I suspect they mean "mark"

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