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Texas AG issues Civil Investigative Demands to 13 entities involved in limiting stock purchases

State News

SAN ANSELMO, CALIFORNIA – DECEMBER 17: In this photo illustration, the Robinhood logo is displayed on an iPhone on December 17, 2020 in San Anselmo, California. The Securities and Exchange Commission has charged Silicon Valley start-up company Robinhood with deceiving customers about how the company makes money. The company has agreed to pay a $65 million civil penalty. (Photo Illustration by Justin Sullivan/Getty Images)

AUSTIN (KVEO) — The State of Texas is joining the shake-up on Wall Street by issuing 13 Civil Investigative Demands (CID) to companies involved with the Reddit-hedge fund situation.

Texas Attorney General Ken Paxton issued the CIDs on Friday directed at Discord, Robinhood Financial, Robinhood Markets, Robinhood Securities, Interactive Brokers, TD Ameritrade, TD Bank, E-Trade, WeBull Financial, Public Holdings, M1 Holdings, Citadel Financial, and Apex Clearing Corporation.

According to Paxton, these entities conspired to prohibit certain stock purchases and required “higher margin reserves for trading certain companies.”

The CIDs request the entities to provide public statements and internal documents on the manner as well as “terms of service, policies related to content control and moderation, and communications between platforms and moderators of chat servers, including decisions to limit, control, or prevent access to the Discord r/WallStreetBets server.”

“Wall Street corporations cannot limit public access to the free market, nor should they censor discussion surrounding it, particularly for their own benefit,” said Paxton. “This apparent coordination between hedge funds, trading platforms, and web servers to shut down threats to their market dominance is shockingly unprecedented and wrong. It stinks of corruption.”

Robinhood’s closing off of certain companies from investors has drawn ire from both sides of American politics.

Senator Ted Cruz (R-TX) and U.S. Rep. Alexandria Ocasio-Cortez (NY-14), among others, took to social media in compliance with one another over their displeasure with Wall Street’s handling of the situation.

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