Robinhood Couldn’t Have Met $3B Clearinghouse Requirement: CEO

The transcript discusses Robin Hood's liquidity challenges following a $3 billion deficit notice from DTCC at 5:11 AM. The company initially lacked the liquidity to meet the requirement, prompting actions to adjust the risk profile and restrict trading in 13 securities. Failure to comply could have led to DTCC liquidating Robin Hood's portfolio, affecting over 13 million customers. The situation highlighted vulnerabilities in Robin Hood's business model and capital requirements.

What time did the DTCC report a $3 billion deficit to Robinhood?

• 5:11 AM Eastern

• 6:00 AM Eastern

• 5:00 AM Eastern

• 6:30 AM Eastern

What action did Robinhood take to manage the liquidity crisis?

• Restricted buying in about 13 securities

• Increased the number of securities available for trading

• Closed all trading activities

• Increased trading in all securities

What would have happened if Robinhood failed to meet the capital requirements?

• Robinhood would have continued trading as usual

• The deficit would have been ignored

• DTCC would have provided a loan

• Forced liquidation of the portfolio

What was the potential impact on Robinhood's customers if forced liquidation occurred?

• No impact on market access

• Total lack of access to the markets

• Increased access to the markets

• Access to more securities

What vulnerability was exposed in Robinhood's business model during the crisis?

• High transaction fees

• Lack of customer support

• Inadequate capital requirements management

• Excessive trading options