- Robinhood is in a "strong position" to support customers through unlikely market events, the company said Tuesday.
- The brokerage said it now has a net capital position of $2.7 billion, which is 25 times what the SEC requires.
- A year ago, Robinhood restricted trading in GameStop and other red-hot meme stocks to curb the wild speculative activity.
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Robinhood said it doesn't expect to surprise customers with trading restrictions again, about a year after its move to limit trades on Reddit-fueled meme stocks angered customers.
The trading app provider has a net capital position of $2.7 billion, 25 times what's required by the Securities and Exchange Commission for registered broker-dealers, it said in a Tuesday blog post.
Robinhood Securities "remains in a strong position to keep serving our customers through unlikely market events," it added.
The company highlighted the steps it's taken to earn back customer trust, such as bringing in round-the-clock phone support and tackling compliance-related risk issues.
A year ago, Reddit traders piled into heavily shorted meme stocks such as GameStop, triggering a market mania that has gone down as a populist movement aimed at disrupting the financial establishment. Robinhood, as well as other brokerages, restricted this trading to curb the wild activity.
CEO Vlad Tenev defended the decision, saying Robinhood was asked for a $3 billion deposit by a securities clearinghouse to back up trades in the volatile Reddit-touted stocks. This wasn't an amount the brokerage could accommodate, because at the time it had only raised $2 billion in venture capital.
Robinhood acknowledged that blocking trading in red-hot stocks had frustrated customers, and it vowed to ensure this wouldn't happen again.
In addition to being investigated by regulators, the retail-trading platform faced more than 50 lawsuits related to the limits on meme-stock trades.
In November, a Miami district court dismissed one such retail-investor lawsuit against Robinhood and market-maker Citadel Securities. The court said there was no evidence of a conspiracy to halt meme-stock trading in this case.
Robinhood is due to report fourth-quarter results after the bell on Thursday, with analysts on average expecting it to post a $355 million loss.