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Robinhood has recently been criticized for its action to halt the trading of some selected stocks and cryptocurrencies that are doing exemplary well in the market.
After Robinhood halted selected stock trading and retail traders gave thousands of negative reviews on the Google Play store, Robinhood’s rating dramatically nosedived to a 1-star. However, Google LLC (NASDAQ: GOOGL) has come to its rescue by deleting over 120,000 negative Robinhood reviews citing violations related to manipulation. Hereby raising the prior rating to a 4.2-star rating.
According to Google, the decision to delete thousands of negative Robinhood ratings was advised by the fact that the company’s policies prohibit ratings that are aimed at manipulating an app’s review.
Robinhood Recent Decisions that Led to 1-Star Rating on Google Play
Robinhood has recently been criticized for its action to halt the trading of some selected stocks and cryptocurrencies that are doing exemplary well in the market. Some of the affected stocks include GameStop Corporation (NYSE: GME), AMC Entertainment Holdings Inc (NYSE: AMC), and also crypto asset Dogecoin (DOGE).
However, Robinhood announced that it will allow limited buying for the halted stocks on Friday. Consequently, GameStop and AMC stocks spiked over 197%, and 56% respectively during Friday’s pre-market. GameStop was trading around $391, while AMC was trading around $13.48.
The outrage in the trading community has pushed Robinhood to the edge, mind you, it is already facing a lawsuit based on its action. The lawsuit claims the trading firm halted trading of selected stocks amid the market session. “Robinhood purposefully, willfully, and knowingly removing the stock ‘GME’ from its trading platform in the midst of an unprecedented stock thereby deprived retail investors of the ability to invest in the open-market and manipulating the open-market,” the class action complaint reads.
Robinhood’s recent action to halt GME, AMC and Dogecoin trading has attracted regulator’s attention in the United States. Representative Alexandria Ocasio-Cortez tweeted that “this is unacceptable. We now need to know more about [Robinhood’s] decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit. As a member of the Financial Services [Committee], I’d support a hearing if necessary.”
GOOGL stocks had dropped approximately 1.17% to trade around $1831.61 during Friday’s pre0market. Reportedly, the Robinhood app on Apple‘s App Store has not received new reviews since Wednesday. According to news outlet The Verge, there were no newer reviews on popular apps like TikTok, thus questioning whether Apple is protecting Robinhood from retail traders’ reviews.
Robinhood has been up and running for the past seven years and managed to amass approximately 13 million users as of 2020. Over the years, Robinhood has been under regulators’ radar including a case in which it was fined $1.25 million by FINRA in December 2019 for failing to ensure that its customers received the best price for orders.