Bafin exonerates Trade Republic

The neobroker Trade Republic was caught in the crossfire by its customers at the end of January. The accusation was market manipulation and collaboration with US hedge funds. Bafin received more than 4,000 complaints. It now investigated and exonerated the Berlin start-up.

4,426 complaints and tips reached the financial regulator Bafin at the end of January to the neobroker Trade Republic. The app had restricted the purchase of six stocks for a few hours. The fintech provided as a reason the technical overload, which would have led to the delay in trading and thus possibly to heavy losses for customers.

Bafin investigated the case. Now Gründerszene learned that the analysis has been completed and the suspicion of market manipulation had not been confirmed. Thus Trade Republic is exonerated for the time being. The company did not comment on this yet.

At the end of January, a call was made on the Reddit platform to buy the shares of several companies such as the games provider Gamestop, on whose price loss several hedge funds had bet. Retail investors bought the shares, and the price rose 1,000 percent at some points, leading to huge losses on the part of the hedge funds. Online brokers such as Trade Republic blocked the buying of the shares for several hours due to the rush, but not the selling, which earned them accusations of manipulation from the users.

Shortly afterwards, Trade Republic explained itself in an email and clarified what had happened: it had read due to the congestion of the trading venues, the Hamburg Stock Exchange later confirmed. In addition, a note appeared in the app, which was interpreted as a discouragement to buy; according to Trade Republic, it only wanted to point out the risks on such a volatile market as at that time.