A Response to the Events of January 28, 2021 by the unFederalReserve Community
It has been one month since the events surrounding Reddit, Robinhood and GameStop Corp (NYSE: GME). We have had an opportunity to gather our own thoughts and integrate them with comments from our eRSDL community.
Robinhood’s side of the story is available via its blog here, and in general, it faults clearinghouse challenges and high fees as the rationale for its action and subsequent inaction. We are not qualified to comment on the legality of its actions, but we do question whether or not Robinhood violated a natural right.
A natural right is roughly defined as, “a principle or body of laws considered as derived from nature, right reason, or religion and as ethically binding in human society.” Natural rights are an entitlement for all personkind.
A natural law, codifying natural rights, form a basic premise of the United States’ Declaration of Independence; whereby, it states:
… that all men [people] are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.
Robinhood’s mission statement implies that not only does it support the concept of natural rights and laws, but that it actively ties its mission to the actualization of those things. Their mission reads:
Robinhood’s mission is to democratize finance for all. We believe that everyone should have access to the financial markets, so we’ve built Robinhood from the ground up to make investing friendly, approachable, and understandable for newcomers and experts alike.
The tools and means for Robinhood to provide unfettered access to capital markets existed. Users joined the platform with a reasonable expectation that they would enjoy such access. Further, Robinhood actively pursued a marketing strategy touting that accessibility. Lastly, GameStop was not the first stock to be pumped on Reddit via Robinhood and the later profited from all those previous occurrences.
Is it fair to say that “right reason” and “ethically binding” actions on the part of Robinhood created a natural right? If its history does not raise its level of responsibility to that of a natural right, then at a minimum, Robinhood failed to live up to it’s own principles.
We look forward to the day that capital markets, liquidity management and finance, in general, are truly democratized. The unFederalReserve community was polled for its thoughts on the events of that day and we thank our community members for their feedback and continuing support.
Note: If you are interested in the history leading up to the events of that day, including how and when certain apps began to lock people out of their positions, there is a great ongoing story about it available from the BBC news. The opinions contained in this blogpost are those of Residual Token, Inc. management and may not reflect the individual views of its employees, agents, contractors, affiliates nor community members.