Yea SBF declared a 7.6 percent investment in Robinhood half a year before the insolvency filing.
Robinhood stock rose by 2% in pre-market trade, trading at $11.10.
Robinhood has reportedly reached a deal with the US Marshals Service to buy back shares. As a result, the firm plans to repurchase $605.7 million worth of shares from Sam Bankman-Fried’s (SBF) Emergent Fidelity Technologies.
Following the bankruptcy filings of SBF’s FTX and Emergent last year, the equities in issue fell under the scrutiny of the US government. The market seems to have responded well to this news, as Robinhood stock rose by 2% in pre-market trade, trading at $11.10.
Coordinating Closely With Authorities
SBF declared a 7.6 percent investment in Robinhood half a year before the insolvency filing in November. But he stressed that he had no plans to take over the trading platform. In addition to the insolvency, SBF faces legal disputes after being accused of fraud in connection with the collapse of the FTX exchange last year.
Given the ambiguity surrounding the confiscated shares, Robinhood’s CFO Jason Warnick stressed the need of obtaining them “free and clear of any claims.” The corporation also expects to coordinate closely with the U.S. DOJ as it works through this complex matter.
It was also announced in February that Robinhood will be repurchasing shares from Emergent Fidelity Technologies. Robinhood’s stock price has risen since the company said it will repurchase shares. But the business is having trouble as retail investors who were formerly quite active on Robinhood’s platform now seem wary due to the uncertain market.