GameStop Trading Restrictions Blamed on Wall Street’s Clearing Firm by Online Broker – WSJ

The chief executive of popular online brokerage Webull Financial LLC said Thursday that the restrictions placed on trading GameStop Corp. and other highflying stocks rested with the platform’s clearing firm that helps streamline trades.

Anthony Denier, Webull’s CEO, said in an interview that he was told Thursday morning by his clearing firm, Apex Clearing Corp., that Webull needed to shut off the ability to open new positions in certain stocks, otherwise the clearing firm wouldn’t be able to settle the trade. Apex Clearing, Mr. Denier said, was told by the Depository Trust & Clearing Corp. that it would need to put up more collateral to help facilitate the settling of trades. That message, he said, was then passed down to Webull, where individual investors can trade securities such as stocks for free.

Apex couldn’t immediately be reached for comment.

The decision to limit trading in a handful of popular stocks by Webull and other brokerages such as Robinhood Markets Inc. prompted outrage from individual investors and some members of Congress. Many of the stocks, including GameStop and AMC Entertainment Holdings Inc., fell sharply Thursday as some of the euphoria around the stocks abated. GameStop dropped 25%, while AMC fell 50%. Both stocks are still up more than 350% for the month.

Webull later said on Twitter that the firm was reopening trading in GameStop, AMC and headphone maker Koss Corp. , the three stocks it had restricted.

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