Disclosure documents in a lawsuit being brought by retail investors against Citadel and Robinhood appear to show evidence of executives of Robinhood insider trading.
As Apes Army reported just a couple of days ago, it would appear that this case has already highlighted evidence that Citadel CEO Ken Griffin Perjured himself when he claimed under oath that no conversation had taken place between the companies in relation to the restriction of purchasing of memestocks by retail investors.
The lawsuit, being brought by plaintiffs including Angel Guzman, Burke Minahan, Christopher Miller and Terell Sterling is currently going through the US District court in the Southern District of Florida. You can see all the documents here.
Robinhood insider trading: Executives sold AMC before turning off the buy button
In fact, Jim Swartwout, the Chief Operating Officer of Robinhood Securities said quite clearly he was going to sell his stock as the following day the company would be turning off buying on GME and AMC amongst other memestocks.
This could be one of the most important disclosures which could potentially bring charges against the company and those executives sold AMC.
Robinhood knew at the highest levels of the company that its risk management
Case 1:21-md-02989-CMA in the Southern District Court of Florida, document 409
system was strained to the breaking point during the week of January 25th. Robinhood Securities
President and COO, James (Jim) Swartwout, who Tenev points to as making the ultimate call to
PCO, says in an internal chat on January 26, 2021, “I sold my AMC today. FYI – tomorrow
morning we are moving GME to 100% - so you are aware.”
The document outlines internal chat (probably on the Slack platform) between employees which showed Robinhood executives sold AMC before turning off the buy button on January 29 2021. This is pretty much the very definition of Insider trading. The public didn't yet know that the buy button was about to be disabled, leaving the only trading option to almost all retail investors being to close their positions.
If that's not an example of Robinhood insider trading, we don't really know what is. They didn't tell the public they were about to turn off the buy button (and tank the stock), well not until at least the COO (and ApeGod only knows who else too) dumped their stock ahead of what was clearly going to be a massive wipeout of value as a result of their actions.
Insider trading is deemed to be illegal when the material information is still non-public and this comes with harsh consequences, including both potential fines and jail time. Material nonpublic information is defined as any information that could substantially impact the stock price of that company.
Definition of Insider Trading, from Investopedia
This information lays it all out:
Of course both Robinhood and Citadel went on to deny accusations of wrongdoing, and in a blog post on their website on January 29th Robinhood claimed quite clearly that their decision to pull the buy button was definitely NOT made at the request of any market maker. To which most Apes know is absolute BS, and the documents in disclosure appear to prove it.
It's not like Robinhood have been fined by the regulator before for some of it's dodgy practises relating to market makers. Just before Christmas 2020, The SEC charged Robinhood for repeated "misstatements that failed to disclose the firm’s receipt of payments from trading firms for routing customer orders to them, and with failing to satisfy its duty to seek the best reasonably available terms to execute customer orders". Robinhood settled, agreeing to pay a $65M fine.
Starting tomorrow, we plan to allow limited buys of these securities. We’ll continue to monitor the situation and may make adjustments as needed.
To be clear, this was a risk-management decision, and was not made on the direction of the market makers we route to.
Quote from blog post made by Robinhood on their website January 28 2021.
This isn't new news. In fact, a number of commentators and analysts were talking about this some months ago, as shown in the image below, a tweet made by Tofiq Fazlullah posted at the end of June 2021:
This video from Matt Kohrs is a good overview of what went down:
As this continues to unfold, Apes Army will of course be reporting everything that can be verified.
The information contained within this article, or any other article on Apes Army is not financial advice, nor do we guarantee the accuracy or validity of any information and this should be regarded as for entertainment purposes only. We do hope you are entertained though, by watching the very public exposure and demise of Robinhood and Citadel Securities (as well as some of the other dodgy companies and Hedge Funds who've been gaming the system for decades...allegedly)
Posted from Apes.Army : https://www.apes.army/robinhood-insider-trading-executives-sold-amc/