Connect with us

World

Fidelity wouldn’t let him sell, costing him $830,000

Published

on

By Matt Egan, CNN Business
Updated 7:25 PM ET, Fri February 12, 2021

New York (CNN Business) — Robinhood is in hot water for banning investors from buying GameStop during part of last month’s Reddit-driven market mayhem. And now Fidelity is being accused of preventing one investor from selling some Reddit darlings, a move he says cost him $830,000.

Louis Hernandez filed a claim with Wall Street’s self-regulator against Fidelity Brokerage Services on Thursday for blocking his attempts to unload shares of Nokia (NOK) and AMC (AMC) on January 28, his lawyer told CNN Business. Hernandez, who lives in Arizona, eventually sold the shares at a steep discount from where they had been trading when he initially tried to sell them, the lawyer said.
“It caused a huge loss for our client in a matter of days. It was really devastating,” William Lewis, the lawyer representing Hernandez, said in an interview.
Fidelity said it had not received this specific complaint and does not comment on specific customers. The company said it does not have any restrictions in place, except for customers who trade with borrowed money, known as margin trading. Fidelity said it regularly adjusts margin and risk requirements for individual stocks based on market risks and other factors.
    “Fidelity strongly encourages all investors to review their investments and ensure they align with their overall financial plan,” the company said in a statement.
    The Financial Industry Regulatory Authority (FINRA), Wall Street’s self-regulating agency to which Hernandez filed, does not publicly release claims and declined to comment.
    The episode illustrates the chaos caused last month when an army of traders on Reddit’s WallStreetBets community sent GameStop (GME), AMC and other stocks skyrocketing. Brokerages such as Robinhood were forced by clearinghouses to put up staggering sums of capital. Hedge funds like Melvin Capital that bet against GameStop had their short positions blown up. And some retail investors lost money when the Reddit-driven stocks imploded.

    A big bet gone bad

    Hernandez bought $1.5 million of shares in AMC on January 27, his lawyer said. The movie theater chain’s stock skyrocketed 301% that day, driven up by traders on WallStreetBets.
    The next morning, Hernandez bought $1.5 million of shares in Nokia, another favorite of WallStreetBets.
    Hours later, Robinhood outraged customers by temporarily suspending purchases of volatile stocks, including AMC and Nokia. Other brokerages imposed restrictions on the Reddit stocks as well.
    Seeking to get ahead of the impending selloff, Hernandez tried to unload his AMC and Nokia shares when they were trading at prices above what he paid for them, his lawyer said.
    “Over a period of hours he was trying to sell. The computer program won’t allow him. He called customer service and they told him he should be able to sell,” Lewis said.

    Margin call triggered

    The timing was especially critical because Hernandez had used borrowed money through the brokerage, known as margin trading, to buy most of the shares.
    Eventually, the share price of AMC and Nokia plunged so deeply that it triggered a margin call, in which brokerages demand that investors who bought stock with borrowed money deposit additional cash or securities. Hernandez attempted to deposit cash to cover the margin calls, but Fidelity refused to allow him to do so, his law firm said.
    According to the claim, Hernandez was forced to liquidate his shares at a steep discount from where they were trading when he initially tried to sell — losing about $830,000 because of the delay, his law firm said.
    AMC closed down 57% on January 28, while Nokia lost 28%.
    “What’s really troubling for me is that when he wanted to sell, they couldn’t execute the orders,” Lewis said. “But as soon as there was a margin call, and they wanted him to sell, he was able to.”
    In addition to Fidelity, Hernandez’s claim also names National Financial Services, the company’s brokerage subsidiary.
    Robinhood CEO Vlad Tenev is expected to testify at a hearing in Congress next week on the Reddit turbulence in financial markets, two people familiar with the matter told CNN Business. Tenev is likely to face questions over Robinhood’s trading restrictions.
      Tenev was asked during a recent interview on the platform Clubhouse why the app only restricted purchases and not sales of GameStop and other Reddit stocks.
      “People get really pissed off,” Tenev said, “if they are holding stock and they can’t sell it.”

      World

      Nigeria crashed aircraft was on rescue mission for kidnapped schoolchildren

      Published

      on

      By Nimi Princewill, CNN
      Updated 10:13 AM ET, Mon February 22, 2021

      Lagos, Nigeria (CNN) — Nigeria’s airforce has said its plane, which crashed shortly after take-off from Abuja airport on Sunday morning — killing everyone on board — was on a mission to rescue the schoolchildren kidnapped last week.

      A spokesman told CNN the aircraft was on surveillance operations in Niger State as part of efforts to rescue at least 42 schoolchildren and staff members taken by gunmen from the Government Science School Kagara last Wednesday. One student died during the attack.
      Air Vice-Marshal Ibikunle Daramola told CNN on Monday afternoon that the air force had donated the military plane to a joint task force coordinating the rescue operation in Kagara.
      “The rescue effort is being coordinated by a multi-agency team… the crashed aircraft was part of the air force’s contribution to the rescue mission,” he added.
        Daramola told CNN that the airforce would continue to support the rescue operation.
          He added that all families of the personnel have been informed, and an investigation launched.
          The ongoing rescue efforts followed a directive by President Muhammadu Buhari to the armed forces and police to ensure all captives are rescued.

          Continue Reading

          World

          Protests in Haiti as political standoff continues

          Published

          on

          By Caitlin Hu and Etant Dupain, CNN
          Updated 7:44 PM ET, Sun February 21, 2021

          (CNN) — Large crowds of Haitians took to the streets again on Sunday, as a standoff between President Jovenel Moise and the country’s opposition movement stretched into its third week.

          “Those of us fighting, who want another Haiti, a Haiti pearl of the Antilles, say no to the dictatorship,” one protester told Reuters in capital city Port-au-Prince, where Haitian opposition and civil society groups had called the demonstration. Another criticized the United States and international organizations for supporting the President.
          At the heart of protests is a dispute over the President’s term limit: Moise has served only four years of the usual five, and says his term ends in 2022 — a stance backed by the United States, United Nations and Organization of American States.
          Protesters, however, say he should have stepped down February 7, citing a constitutional provision that starts the clock once a president is elected, rather than when he takes office.
            “We want the international community (to) understand that the Haiti people won’t back down on their demands. Jovenel Moise must leave the national palace for a peaceful transition that can lead us to the elections,” opposition leader André Michel told CNN on Sunday.
            This month’s protests also reflect years of increasing bitterness in Haiti over the country’s economic pain and violent crime. Killings and a wave of hundreds of kidnappings in particular have driven public outrage, according to a recent United Nations report, which recorded a monthly average of 84 demonstrations in the second half of 2020.
            Moise has blamed his administration’s poor record in dealing with such fundamental issues on the country’s system of governance, and on complications and lack of clarity in the constitution itself. “Since the beginning of my term, the country has never known stability,” he acknowledged in a February 12 tweet.
            With an eye toward empowering the office of the president for the future, he has vowed to hold a referendum on changes to the constitution in April. This will be his legacy project, Haiti’s ambassador to the United States, Bocchit Edmond, told CNN.
            However, critics are skeptical of the legitimacy of any constitutional changes made in the current political climate and without institutional checks and balances in place. General elections are expected to follow in the fall.
              In a speech last Sunday, amid celebrations for Carnival, which he celebrated with large crowds of supporters and revelers, Moise expressed his determination to see the country through another year.
              “Haiti is for me, for my kids, for the people here dancing. The people who don’t want me to do the people’s work will stop, or I will make them stop. I was elected to do a job, and I will do it,” he said.

              Continue Reading

              World

              Oil spill leads Israel to close beaches as it faces ‘severe ecological disaster’

              Published

              on

              By Sharif Paget
              Updated 1:41 PM ET, Mon February 22, 2021

              (CNN) — Israeli authorities are trying to locate the source of a suspected oil spill that has been described as one of the most severe ecological disasters to hit the country, threatening wildlife, forcing beaches to close and prompting a mass cleanup.

              Blobs of sticky tar started washing up on the country’s Mediterranean shores last week. Images posted on official government accounts showed sea birds and turtles covered in tar and sticky oil.
              “The enormous amounts of tar emitted in recent days to the shores of Israel from south to north caused one of the most severe ecological disasters to hit Israel,” the country’s Nature and Parks Authority said Sunday.
              The extent of the pollution is so bad, Israel’s Ministry of Interior issued an advisory Sunday urging people to stay away from the country’s beaches.
                A massive cleanup is underway but the Nature and Parks Authority said it would take a long time to make the marine area safe again. It has established a registration and information center for volunteers who wish to help.
                “I was very impressed by the exemplary voluntarism of the citizens who came to clean up the beaches. We must maintain our beaches, our country and the environment,” Netanyahu said in a statement issued by the Prime Minister’s office.
                “I have just spoken with the Egyptian Petroleum and Mineral Resources Minister who has come to us, and we proposed that every ship that you see here be powered by natural gas instead of polluting fuel, as happened here,” he continued.
                Gamliel said it was their “moral obligation to the public is to locate those responsible for the event,” according to the statement.
                  “We have the possibility of suing the insurance company of the ship that is responsible for the pollution and we will do everything to locate it,” she said.
                  In a separate statement posted to her Twitter account, Gamliel said, “We are making every effort to find those responsible for the disaster, and we will bring to the government’s approval tomorrow a proposal for resolutions to rehabilitate the environment.”

                  Continue Reading

                  World

                  Seven dead in Nigerian military plane crash

                  Published

                  on

                  Lagos, Nigeria (CNN) Seven people were killed when a Nigerian military plane crashed on approach to Abuja airport on Sunday, a spokesman for Nigeria’s Air Force said.

                  “All 7 personnel on board died in the crash,” Air Vice Marshal Ibikunle Daramola said on Twitter.
                  He added that the Chief of the Air Staff has ordered an immediate investigation into the incident.
                  “A military aircraft King Air 350 has just crashed short of our Abuja runway after reporting engine failure enroute [to] Minna. It appears to be fatal,” said the country’s aviation minister, Hadi Sirika, confirming the incident in a statement.
                   

                  AIRCRAFT ACCIDENT

                  This is to confirm that a Nigerian Air Force (NAF) Beechcraft KingAir B350i aircraft crashed while returning to the Abuja Airport after reporting engine failure enroute Minna. First responders are at the scene. Sadly, all 7 personnel on board died in the crash

                  — Air Vice Marshal Ibikunle Daramola (@KunleDaramola3) February 21, 2021

                   
                  In a follow-up communication Sunday afternoon, a spokesman at the Ministry of Aviation, James Odaudu, said the “aircraft reported engine failure at time 10:39 and crashed landed on the final approach path of Abuja Runway 22 at time 10:48UTC.”
                  Odaudu said fire fighters have been deployed to the scene to put out a raging blaze that had engulfed the airplane.
                  An aviation worker who asked not to be named — citing lack of official clearance to talk to the press — told CNN that he witnessed the crash.
                  “The crash occurred not very far from the runway. The pilot had tried returning to the runway after taking off,” he said.
                  The worker said the pilot swerved the plane to its crash site which is in a desolate area. He said the aircraft narrowly avoided warehouses and makeshift settlements around the Nnamdi Azikwe International airport.

                   

                   
                   
                   
                  •  
                  •  

                  Continue Reading

                  World

                  Why Britain’s anti-immigration politicians are opening the doors to thousands of Hong Kongers

                  Published

                  on

                  By Tara John, CNN
                  Updated 7:29 PM ET, Sat February 20, 2021

                  (CNN) — Eighteen months ago, Malcolm was at the vanguard of Hong Kong’s pro-democracy movement.

                  Full of bravado and often clad in black, the 21-year-old oversaw a group of 60 combative front-liners who embraced confrontational tactics against the police while demanding greater democracy in the former British colony.
                  Today, he is applying for asylum in the United Kingdom, and separated from his family in Hong Kong where he feels he can longer visit. Malcom believes if he returns to the Chinese city he could be arrested under a sweeping national security law imposed by Beijing on Hong Kong last June, which scaled up penalties against dissent to include punishments as severe as life imprisonment.
                  Since then, nearly 100 activists have been arrested under the new law. When Hong Kong police apprehended a protester friend of Malcolm’s in October, he booked a red-eye flight to London. Malcolm asked CNN not to use his real name, for fear that his family — who remain in Hong Kong — could face repercussions.
                    The British government has called the security law a clear violation of the “one country, two systems” policy meant to ensure Hong Kong’s autonomy from Beijing until 2047. In its wake, the UK has opened a six-year pathway to British citizenship for holders of British National (Overseas) passports (BN(O)), a special visa category created for Hong Kong nationals before the 1997 transfer of power.
                    Sze has settled into London life: She already has strong opinions on the snail’s pace of London buses and is counting the days to when lockdown ends and she can go shopping on Oxford Street.
                    While it can be hard to find the authentic Cantonese cuisine she grew up eating in Hong Kong, Sze marvels at how much cheaper food is at British supermarkets.
                    “The food quality is better, the price is cheaper and the rent is cheaper,” she told CNN.
                    Sze cannot get a job until her BN(O) visa is approved, but she is optimistic that the UK’s coronavirus-induced economic slump will not get in the way of her finding work. “I am open to any [job] option — it really depends on how much savings I have,” she said.
                      But her biggest concern is the fate of fellow dissidents going through the asylum process, and whether her compatriots who move to the UK will give up the fight for independence back home.
                      “Hong Kongers should never give up, no matter if they’ve left Hong Kong or not,” she said.

                      Continue Reading

                      Trending