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Webull and Public remove restrictions on ‘memestocks’ after citing trade settlement firm as the cause

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    TC-Social Webull and Public remove restrictions on ‘memestocks’ after citing trade settlement firm as the cause

    Two of the popular retail stock market trading apps that have hosted much of the activity related to the Wall Street Bets subreddit-spurred run on stocks including GameStop (GME) and AMC, among others, have removed all restrictions on their exchange by their users. Both Webull and Public had restricted transactions for the affected stocks earlier in the day, along with Robinhood.

    Webull and Public both attributed the restrictions placed on these volatile stocks not to any effort to curb their purchase or sale, but instead cited the costs associated with settling the trades on the part of their clearing firm, Apex. Both Webull and Public employe Apex to clear trades made by users via their platform. In an interview with Webull CEO Anthony Denier, Yahoo Finance confirmed that the restriction was not something the company had any hand in deciding.

    NEW: The CEO of Webull tell us the decision to join Robinhood in restricting AMC and GameStop trades came from soaring costs to settle its users trades:

    "It wasn't our choice … this has to do with settlement mechanics in the market."

    — Zack Guzman (@zGuz) January 28, 2021

    Public confirmed via Twitter that users can now buy and sell GME and AMC and KOSS on the platform, thanks to the resolution of the Apex blocker. Meanwhile Webull noted that all three stocks are now also available for exchange via their app. Other platforms like SoFi so far haven’t restricted the stocks, CEO Anthony Noto confirmed on Twitter.

    We're back.

    Our clearing firm, Apex, has resumed the ability to buy $GME, $AMC, and $KOSS on Public. We appreciate their cooperation and are grateful to our members for their patience and understanding.

    — (@public) January 28, 2021

    Robinhood earlier issued a blog post noting that it is restricting a number of stocks tied to the r/WallStreetBets action to counter short seller hedge funds, arguing that it’s doing so in the best interest of users. This has not seemed to have been much appreciated by most users, based on the reaction on social media to that action thus far. Robinhood at no time references any technical barriers imposed by any clearing house.