Robinhood app, TD Ameritrade restrict trading of GameStop, AMC stock

GameStop's stock continued to make big moves Wednesday, surpassing $300 a share, fueled by Reddit users taking on Wall Street (here's what it means). But investors looking to make trades have faced multiple issues on their preferred investing sites and apps over recent days, with many experiencing service disruptions, according to Bloomberg. The frenzy over GameStop stock created a wealth of memes, but has also led to TD Ameritrade and the Robinhood app restricting new purchases of particular stocks (GameStop, AMC and others) and caused a subreddit to go private and a Discord server to be shut down for violating terms of service. 

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On Thursday morning, Twitter users began posting screenshots of their Robinhood apps, which showed a message appended to the stocks of GameStop; AMC; Bed, Bath and Beyond; and Nokia: "This stock is not supported on Robinhood."

Robinhood said in a blog post later Thursday morning, just before the New York Stock Exchange opened: "In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK."

In a tweet, the wsb mod Twitter account (which is tied to the Wall Street Bets subreddit community driving recent trades), said, "Individual investors are being stripped of their ability to trade on [the Robinhood app]. Meanwhile hedge funds and institutional investors can continue to trade as normal."

Congresswoman Rashida Tlaib responded on Twitter to Robinhood's decision, calling for the House Committee on Financial Services to hold a hearing on the trading service's actions, calling them "market manipulation."

An image circulating on social media Wednesday just after noon ET showed an apparent warning from TD Ameritrade saying it put restrictions on the trading of stocks for GameStop, AMC and others. The brokerage firm confirmed the restrictions, saying it made the decisions "out of an abundance of caution amid unprecedented market conditions and other factors."

"In the interest of mitigating risk for our company and clients, we have put in place several restrictions on some transactions in $GME [GameStop], $AMC [AMC Theaters] and other securities," reads the TD Ameritrade message.

A TD Ameritrade spokesperson says the restrictions made include increasing requirements needed to borrow money for stocks known as a margin and limiting transactions such as short sales. 

"It is not uncommon for us to make such decisions, which we consider on an individual basis, in the interest of mitigating risk," the spokesperson said Wednesday via email. "We have been adjusting our requirements for several days as we continued to see trends indicating unusual volume in an unprecedented market environment, which appear to be divorced from traditional market fundamentals. We have made what we believe to be prudent and appropriate decisions to place some limits on certain transactions for certain securities."

The fervor over stock trading hasn't gone unnoticed. Nasdaq CEO Adena Friedman told CNBC Wednesday that if there is any market manipulation going on, it may halt the trading of a stock to investigate. AMC is listed on Nasdaq, while GameStop is traded on the New York Stock Exchange. 

William Galvin, the secretary of the Commonwealth of Massachusetts, told Barron's Wednesday that he thinks the New York Stock Exchange should "consider simply suspending it for a month and stop trading it." 

The Securities and Exchanges Commission, which oversees the stock markets, told the New York Times it's watching "internet chat rooms for signs of potential market manipulation." 

"We are aware of and actively monitoring the on-going market volatility in the options and equities markets, and consistent with our mission to protect investors and maintain fair, orderly and efficient markets," the agency said in a statement Wednesday. "We are working with our fellow regulators to assess the situation and review the activities of regulated entities, financial intermediaries and other market participants." 

Even the White House is "monitoring the situation," according to Press Secretary Jen Psaki Wednesday. 

Clarification:  This story initially misstated the actions TD Ameritrade took. The firm put certain restrictions in place for GameStop and AMC stock, but did not ban them.