Robin Hood is tethered to Citadel Capital who bailed out Melvin Capital by $2 billion. They are willing to break the law because whatever the SEC does will be less than the money they are about to lose once their short options come due.
Robin Hood? They are behaving more like Robber barons. That should no surprise given their proximity to Leland Stanford Junior University and criminals in Silicon Valley.
That's incredible! Having worked in a bank, I can't even imagine what would make them do this. Certainly their risk if they just let the positions alone is lower than if they sold people out forcibly. I wonder if they got a call from the SEC saying "hey it would be a shame if someone were to recharacterize your business of offering fractional shares as new securities offerings without a prospectus (i.e. totally unrelated activity) but by the way, have you noticed the action in GameStop"?