Washington: After online trading app Robinhood, co-founded by Indian American Baiju Bhatt, created a mayhem among the traders this week, the US Securities and Exchange Commission (SEC) has said it is closely monitoring and evaluating the extreme price volatility of certain stocks’ trading prices over the past several days.
Although the FAA did not directly name Robinhood, GameStop and others, it acknowledged that extreme stock price volatility has the potential to expose investors to “rapid and severe losses and undermine market confidence”.
Silicon Valley-based online trading app Robinhood had to raise emergency funding of $1 billion from its existing investors after demands on its cash skyrocketed amid “extraordinary circumstances” in the market.
Robinhood’s move prevented investors from initiating new positions in shares of GameStop, AMC Entertainment Holdings, American Airlines, BlackBerry, Bed Bath & Beyond Inc., Express Inc., Nokia and Trivago, among others.
