>> WELCOME BACK TO BETWEEN
BELLS THE BALANCE OF POWER AND
THE STOCK MARKET IS CURRENTLY
UNDERGOING A
RADICAL SHIFT WITH AVERAGE JOE
AND JANE INVESTORS IMPACTING
THE FINANCIAL SYSTEM IN A WAY
THAT'S TRADITIONALLY LIMITED TO
HEDGE FUNDS AND INVESTMENT
BANKS. BUT YESTERDAY, ROBIN
HOOD AND OTHER ONLINE TRADING
APP INSERTED THEMSELVES
DIRECTLY INTO THE STORY WHEN
THEY DECIDED TO
RESTRICT TRADING ON CERTAIN
STOCKS LIKE GAMESTOP BEING
PUMPED UP BY THE ONLINE
COMMUNITY. MOST TRADING WAS
ALLOWED TO RESUME TODAY AFTER
AN ENORMOUS PUBLIC BLOWBACK
JOINING US NOW TO DISCUSS IS
JACOB FRENKEL FORMER SEC LAWYER
AND CHAIR OF THE GOVERNMENT
INVESTIGATIONS AND SECURITIES
AND FORSMAN PRACTICE
AT DICKINSON WRIGHT PLLC GREAT
TO HAVE YOU WITH US ON THE SHOW
JACOB SO WE HEARD FROM ROBIN
HOOD CEO VLAD TENEV HE SAID ON
CNBC YESTERDAY THAT THE MOVES
TO LIMIT TRADING ON GAMESTOP
AND OTHER COMPANIES WEST TO
PROTECT ROBIN HOOD. AND ITS
CUSTOMERS IS THIS A VALID
ARGUMENT.
>> I DO THINK IT IS A VALID
INTERESTINGLY YOU CAN WE TALK
ABOUT THE TRADING HOPING UNDER
SCRUTINY AS
AN ASIDE ON TUESDAY EVENING.
I WAS ACTUALLY ADVOCATE
ON CNN WE SEE THAT THE SEC
SHOULD BE USING ITS TRADING
SUSPENSION AUTHORITY
WITH RESPECT TO GAMESTOP BUT
THE ISSUE RIGHT NOW IS AROUND
ROBIN HOOD. I DO THINK IT IS OR
IS A REASONABLE ARGUMENT
THEY'RE MAKING
BECAUSE HE BROKERAGE
FIRM MUST ACT IN THE BEST
INTEREST OF ITS CUSTOMERS AS
WELL AS
THE MARKETS AND WHILE THERE'S A
FOCUS ON THESE PARTICULAR
CUSTOMERS. THE
FACT IS YOU KNOW ROBERT HAS
THOUSANDS ABOUT 10'S OF
THOUSANDS
OF CUSTOMERS AND ALL OF A
SUDDEN THIS TO YOU KNOW THE
GAMESTOP WERE TO HEAR THEM.
BOTTOM OF THE FALLOUT OF THE
PRICE OF THAT STOCK AND TO THE
EXTENT THEY HAVE A LOT
OF CUSTOMERS 2 OF YOU KNOW BOTH
TRADED ON MARGIN MANY WOULD
LIKELY DENY THAT FIRST AND THE
IMPLICATIONS
OF HAVING TRADED ON ON MARGIN
MEAN THAT COULD
IMPERIL NOT JUST YOU KNOW NOT
JUST ROBIN
HOOD ITSELF. BUT ALSO MANY
OTHER CUSTOMERS WHO ARE NOT
ANYWHERE NEAR GAMESTOP AND THE
LAST POINT I WANT TO MAKE AS
YOU KNOW HE IS WE'RE TALKING
ABOUT A COMPANY
THAT HAND. THE SEPTEMBER WAS
THE SUBJECT OF A SETTLED SEC
ENFORCEMENT ACTION AS WELL AS
AN ACTION
BY ME, MASSACHUSETTS ATTORNEY
GENERAL HE GOT TO MAKE THIS
DECISION LIGHTLY YOU KNOW AND
THEY'VE GOT VERY CAPABLE
LEGAL STAFF. YEAH, YEAH, I'M
OUT OF THE REALLY THAT IT
CAREFULLY WHAT ARE ITS
OBLIGATION RIDES, NOT JUST
ABUSE AS MERS BUT OTHERS.
>> WELL IF YOU'RE SEEING A
PLATFORM LIKE ROBIN HOOD
PUTTING A CALL TO START
TRAINING AT ACTIVITY IT'S NOT
COMING FROM THE SEC FOR
EXAMPLE, THEN YOU ARE
ONLY LIMITING A SUBSET OF
INVESTORS IN THAT YOU ARE
LITERALLY REMOVING THE OTHER
SIDE OF THE TRADE FOR PEOPLE
WHO ARE TRADING WITHIN THE
ROBIN HOOD APP AND THESE OTHER
FINTECH PLATFORMS BUT THEN
HEDGE FUNDS AND INSTITUTIONS
THEMSELVES
CAN STILL TRADE FREELY, SO IT
SEEMS IN SOME WAYS IT'S
QUOTE UNQUOTE MARKET
MANIPULATION AND QUITE UNFAIR
TO THOSE RETAIL INVESTORS HOW
DO YOU RECONCILE THAT AND THAT
IT
IT IS IN SOME WAYS UNFAIR TO
THESE RETAIL INVESTORS.
>> IT'S A GREAT QUESTION AND
THERE CERTAINLY ISN'T IN CONGO
IN HERE, BUT ALSO MORE
EXPERIENCED INVESTORS WILL ALSO
HAVE ACCOUNTS OF MULTIPLE FIRMS
TOO. SO IT'S YOU KNOW
IT'S SO THEY WERE REALLY
TALKING ABOUT HERE IS THE
EXPERIENCE LEVEL ROBINHOOD
ROAD, NOT THE ONE WHO'S ENTIRE
MODEL AND I'M NOT I DON'T WANT
HER ON A PROFESSOR ANY YOU KNOW
ANY BUT BEYOND THE LIMITED
FAMILIARITY WITH YOU KNOW WITH
ROBIN HOOD AND AND SIMILAR
FIRMS
AND PLATFORMS. YOU KNOW HE IS
TO MAKE MORE ACCESSIBLE THE
MARKETS. THE SAME TIME MAKING
THE MARKETS WERE ACCESSIBLE.
I MEAN YOU HAVE FOR YOU KNOW
THERE'S A FIRM OUT OF CHICAGO
TO BRING MUCH IS KEY. THEY DID
TOO. THE EDUCATION. ITS
INVESTORS BECAUSE THERE'S A
RECOGNITION THAT THEY'RE
GETTING INTO A SPACE THAT
♪
CAN BE EXTREMELY VOLATILE HAVE
SIGNIFICANT ON.
YOU KNOW ON THEIR RESOURCES IF
A COMPANY GOES SOUTH. SO I
COULD HEAR THE
ARGUMENT ABOUT IS THIS
MANIPULATE THE FACT IS
IF YOU KNOW WHAT I'M SAYING IS
ROBIN IT HAPPENED FROM OF AN TO
HIS CUSTOMERS AND THE MARKET
MANIPULATION IS A
SPECIFIC TERM. IN THE MARKET I
THINK WHEN WE TALK ABOUT IT AS
YOU SEE THIS SHIRTS. NO I DO
THINK ONE OF THINGS THAT SHE'S
GOING TO LOOK AT IS WHERE THERE
WAS
MANIPULATIVE ACTIVITY WITH
RESPECT TO THE ACTUAL TRADING
IN GAMESTOP BOTH UNDER THE
ANTIFRAUD PROVISION AND BECAUSE
WE'RE TALKING ABOUT A NEW YORK
STOCK EXCHANGE
LISTED STOCK UNDER SECTION 9,
8, 2 WHICH IS THE MAN TO
MANIPULATION PROVISIONS OF THE
SECURITIES EXCHANGE ACT WRITING
34. BUT YOU'RE BACK TO YOUR YOU
CAN USE THEIR INCOME BUT WE
ABSOLUTELY THERE. YEAH IT IS
UNLIKELY TO BE SCRUTINIZED.
YES, IT IS, BUT I DO THINK
ROBIN HAS GOING TO HAVE A
COMPELLING ARGUMENT THAT WAS
ACTUALLY ACTING AS INTEREST OF
HIS CUSTOMERS.
>> JACOB QUICKLY DOES ANYTHING
NEED TO CHANGE ABOUT THE NAME
SURE OF SHORT SELLING AND
REGULATION AROUND AS A RESULT
OF ALL THIS.
>> GREAT QUESTION AND A SHORT
SHORT SELLING HAS ALWAYS BEEN
YOU YEAH OFTEN DISCUSSED ISSUE
WITHIN THE MARKETS.
I'M OF THE VIEW THAT SHORT
SELLING IS NECESSARY FOR PROPER
PRICED IS CRITICAL TO THE
PROPER PRICING MECHANISM OF
THE MARKETPLACE. YOU'VE GOT A
REGULAR RED DASHED RED SHOWS IS
CALLED REGULATION
REGULATION, SHO. IT ACTUALLY
DOES IMPOSE CONSIDERABLE
LIMITATIONS ON ON
SHORT SELLERS. THE LONG LIKE
THE SHORT AND THE SHORTS ARE
OUT THERE TRYING TO SAY THIS
WHAT WE THINK A COMPANY IS
OVERVALUED FRAUDULENT ACTIVITY
ON THE SHORT SIDE HAS WELL AS
ON THE LONG SIDE.
HE IS A VIOLATION OF FEDERAL
SECURITIES LAWS. THAT IS WHAT
THE AS YOU SEE IN FORCES
THROUGH ITS ENFORCEMENT
PROGRAM. I DON'T
THINK THAT THE ANSWER IS
ADDITIONAL REGULATION OF IT
WE'RE GOING TO SEE ADDITIONAL
REGULATION COME OUT OF
THE ROLLER COASTER RIDE WE'RE
IN RIGHT I DO THINK ALL THESE
INCREASED WEATHER THE HOUSE OF
REPRESENTATIVES WHETHER THE
SENATE WHETHER THE SEC. YOU
KNOW WHAT THEY REALLY NEED TO
FIGURE OUT HERE IS THERE A
YOU KNOW, AND CONSIDERABLE DO.
THE WORST IN THE MARKETPLACE
THAT BEING SOCIAL MEDIA IS NOW
AS COMPELLING A FACTOR AS
CORPORATE FUNDAMENTALS WHICH
HISTORICALLY HAVE REALLY GOOD
RIPE OR THE INVESTMENT
DECISIONS THAT ARE THE ADDED