Robinhood CEO Goes To Confessional: Vlad Tenev Admits Mistakes On Chamath Palihapitiya's Podcast

Robinhood CEO Vlad Tenev admitted his company could have done a better job explaining the restrictions it took amid the Reddit and GameStop Corp. GME craze.

What Happened: “No doubt we could have communicated this a little bit better to customers,” Tenev said on the All-In Podcast late Friday, the co-host of which, Chamath Palihapitiya, said earlier that those who made the restrictions decision “should go to jail.”

“We just did what we had to do to meet our deposit requirements. Because if we didn’t, we would be in a violation, and the consequences would be much worse,” Tenev explained, referring to the decision the company made on Jan. 28. 

But the platform’s announcement angered a lot of customers, and the comments flooded Twitter and other social media.

Either @RobinhoodApp allows free trading or it's the end of Robinhood. Period.

— Dave Portnoy (@stoolpresidente) January 28, 2021

The platform's CEO shared that he had received a lot of emails and phone calls after the emails about trading restrictions were sent.

 “As soon as those emails went out, the conspiracy theories started coming, so my phone was blowing up with, ‘How could you do this, how could you be on the side of the hedge funds?’” he said.

“We probably could have offered more detail into that, with the foresight that maybe customers would think that a hedge fund forced us to do it.”

Tenev also added that “the [restricting] process is operationalized at Robinhood,” and the platform has done it before “from time to time under different circumstances.”

Why It Matters: The comments precede the U.S. House Financial Services Committee hearing on Feb.18, where Tenev, along with the CEOs of Reddit, Citadel Securities, and Melvin Capital, will be testifying.

Photo by Noam Galai, courtesy WikiMedia/Creative Commons.