As the dust settles over the Robinhood-GameStop debacle, the company is picking up the pieces with a bruised reputation, lawsuits, and the likelihood of enhanced government oversight.

Why should we care?
Last week, brokerage Robinhood blocked trading of GameStop and other heavily-shorted stocks amid a demand from a clearinghouse for $3B to back up the trades. Robinhood CEO Vlad Tenev – who was taken to task by CNN’s Chris Cuomo last week – said the company had no choice but to restrict trades in order to meet regulatory capital requirements (it’s since resumed trades of affected stocks). Robinhood wasn’t the only brokerage to halt trading in response to the surge of activity; Webull, M1 Finance, and Public also placed buying restrictions on GameStop and AMC Entertainment on Thursday Jan. 28, citing issues with their trade clearing firm Apex Clearing. Among these platforms, Robinhood has been critiqued for the lack of transparency of its response. By contrast, Public tweeted to its users on Jan. 28 that its clearing firm decided to halt trading of certain stocks, that it disagreed with the move, and that it was working to resolve the issue. The difficulties last week also highlighted notable user experience issues with the Robinhood platform, including its move to simply remove GameStop from search results, and to block people from buying GameStop shares. On top of a damaged brand, Robinhood now faces 33 federal lawsuits, and calls for the Securities & Exchange Commission to take action.