The CEO Of Robinhood Has Revealed That The Clearing House That Handles All Stock Trades The NSCC Demanded A 3 Billion Security At 3am In The Morning During Dramatic Negotiations Before The Company Stopped GameStop Trades

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The CEO of Robinhood has revealed that the clearing house that handles all stock trades, the NSCC, demanded a $3 billion security at 3am in the morning during dramatic negotiations before the company stopped GameStop trades. 
Speaking during a virtual event hosted by Tesla CEO , Vladimir Tenev offered an explanation behind his company's decision to Thursday to restrict the purchase of GameStop shares and several other stocks.
The controversial move, that sparked widespread outrage, came after short selling hedge funds lost billions when Redditors organised on the WallStreetBets page banded together to drive up the price of the video game retailer's share price, resulting in hedge funds losing billions of dollars. 
At 3 a.m.

on Thursday,  that Robinhood's operations team was sent a file by the clearinghouse that handles all stock trades - the National Securities Clearing Corporation (NSCC) - requesting a security deposit of $3 billion.
Elon Musk was involved at the start of the Reddit frenzy when he tweeted a link to the Reddit board with the word 'Gamestonk!!'.
Robinhood CEO Vlad Tenev is seen above.

Speaking to Elon Musk on Sunday, he said that the NSCC demanded a $3 billion security deposit the morning before the company stopped GameStop trades, sparking outrage among the app's users
'We have to put up money to the NSCC based on some factors including things like the volatility of the trading activity into certain securities,' he explained during a Clubhouse virtual event on Sunday night.
'And this is the equities business so it's based on stock trading and not options trading or anything else.'
'So, they give us a file with the deposit and the request was around $3 billion, which is, you know, about an order of magnitude more than what it typically is.'
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Musk continued to press Tenev for answers, asking 'Everyone wants to know did something shady go down here?', to which Robinhood's CEO denied, saying the NSCC was 'reasonable' despite the request.
'I wouldn't impute shadiness to it or anything like that and actually you know the NSPCC was reasonable,' he said, before adding that the regulator worked with Robinhood to lower the amount.
Musk pressed again, asking 'is anyone holding your hostage right now?' probing Tenev on whether the NSCC was bullying the trading app.
The statement sheds some new light on the surreal events of the week, in which GameStop shares surged as part of a campaign promoted on Reddit
Tenev avoided the question, saying 'thanks for asking', before calling the experience 'nerve wracking' and saying he was asleep at the time of the request.
He went on to tell Musk that he and the company's Chief Operating Officer called the 'higher-ups' at the NSCC to 'figure out what's going on.'
The NSCC agreed to lower the deposit amount to $1.4 billion, with Tenev saying that that was 'still a high number' before the team proposed how to manage the risk throughout the day, 'marking these volatile stocks - that were driving the activity - [with] positioning closing only,' he said.
'So, at 5.30, or five in the morning, they [the NSCC] came back and they said okay, the deposit [should be] 700 million, which we then deposited and paid promptly.

And then, everything was fine,' he said.
He went on to acknowledge that as a result, 'this was a bad outcome for our customers. Part of what's been really difficult is Robinhood stands for democratizing access to stocks.

Elon Musk was involved at the start of the Reddit frenzy when he tweeted a link to the Reddit board with the word 'Gamestonk!!'.

In the hours following his Tweet on Tuesday, GameStop shares rocketed 60 percent
'Yes, we want to give people access so we had no choice in this case, we had to conform to our regulatory capital requirements,' he said.
'So it sounds like this organization calls you up and they basically have a gun to your head,' Musk said.
'Either you put up this money or else. Basically, what people are wondering is did you sell your clients down the river? Or did you have no choice?'
'I think that's fair,' Tenev replied, saying 'We have to comply with these requirements, financial institutions have requirements.'
The Robinhood controversy arose after millions of Redditors fought back against Wall Street hedge funds short selling GameStop stock.
Elon Musk was involved at the start of the Reddit frenzy when he tweeted a link to the Reddit board with the word 'Gamestonk!!'. In the hours following his Tweet on Tuesday, GameStop shares rocketed 60 percent. 
Musk's call-outs to certain companies have influenced companies in the past, and has faced issues with the SEC for tweeting about Tesla's stock. 
The NSCC is a subsidiary of DTCC.

The DTCC is the institution that actually performs the exchange of stocks for cash, where securities are deposited for safekeeping as trades are being executed, enabling the instant buying and selling of stock even though the actual settlement of the trades takes a day or more.
Brokerages have to post money with the DTCC to cover trades while they wait for their customer's trades to settle.
Normally, those deposit requirements are manageable, because brokers have customers both buying and selling the same stocks, so if the broker fails their book with the DTCC balances out.
Claims circulated on social media Thursday that Robinhood was forcibly selling off shares of GameStop without the account holder's permission after it blocked users from buying shares
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