Bafin exonerates Trade Republic

The neobroker Trade Republic was caught in the crossfire of its customers at the end of January. It was accused of market manipulation and closing ranks with US hedge funds. Bafin received over 4,000 complaints. It has now investigated and exonerated the Berlin start-up.

Bafin received 4,426 complaints and reports about the neobroker Trade Republic at the end of January. The app had restricted the purchase of six shares for a few hours. The fintech gave as its reason the technical overload, which would have led to delays in trading and thus possibly to heavy losses for customers.

Bafin investigated the case. Gründerszene has now learned that the analysis has been completed and the suspicion of market manipulation has not been confirmed. Trade Republic is therefore exonerated for the time being. The company has not yet commented on the matter.

At the end of January, the Reddit platform was used to call on people to buy the shares of several companies such as the games provider Gamestop, on whose share price loss several hedge funds had bet. Private investors bought the shares and the price rose by 1,000 percent at some points, leading to huge losses for the hedge funds. Online brokers such as Trade Republic blocked the purchase of shares for several hours due to the rush, but not the sale, which led to accusations of manipulation from users.

Shortly afterwards, Trade Republic explained itself in an email and clarified what had happened: it had been due to the congestion on the trading venues, as the Hamburg Stock Exchange later confirmed. In addition, a note appeared in the app that was interpreted as advising against buying; according to Trade Republic, it only wanted to draw attention to the risks on such a volatile market as at that time.