Charlie Munger updates Robinhood’s critique, App Likens to Racetrack Betting

He said, “It’s just wild profiteering, like casino gambling or racetrack betting. There is a long history of destructive capitalism, those trade groups that took over the for-profit people. ”

Mr Munger, 97, is vice-chairman of Berkshire Hathaway Inc. and Warren Buffett’s long-time business partner. His remarks on Thursday reflected criticism he had made at Robinhood the day before.

These original barbs from Mr. Munger inspired a rebound from the break. Robinhood spokeswoman Jacqueline Ortiz Ramsay said Mr Munger’s remarks on Wednesday about racist people were “disappointing and elitist.” Mr Munger said: “It is very silly of culture to encourage so much game in stocks. ”

“In one fall a new generation of investors has been criticized and this statement looks at the cultural movement taking place in our country today,” she said. “Robinhood was created to allow people who do not have access to generational wealth or the resources that come with it to start investing in the U.S. stock market. ”

After listening to the full Robinhood statement later on Thursday, Mr Munger said, “Everyone wants to defend the way they make a living. That is just human nature. That’s all I want to say about this. “

Robinhood recently found himself in the middle of a storm around GameStop Corp.

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shares, which rose abruptly, fell and have risen again amid a frenzy with individual investors. His chief executive was questioned harshly at a Congressional hearing this month.

The breach has also contradicted an investigation by Massachusetts secure regulators, which in December criticized the trading platform for exposing customers to “unnecessary trading risks. “Customers have long been attracted to the app because of the free stock trades and the simple and attractive mobile-first platform. Massachusetts regulators, by contrast, have said that many of these same traits have “gamified” the investment experience.

Robinhood has denied the allegations and has previously said it has made “significant improvements” to its range of trading options and has added safeguards and improved educational materials. Last month, the bankruptcy responded to Massachusetts regulators, saying their complaint erroneous “the Robinhood experience.”

It started back and forth with Mr. Munger when the investor was famous at the Daily Journal’s annual general meeting Corp.

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, of which he is chairman.

At Wednesday’s meeting, Mr. Munger, who has previously visited the virtues of patience when investing, was asked about the recent Reddit-fuel frenzy surrounding GameStop. In a broad response, Mr Munger said he believes “you should try to make your money in this world by selling other things that are good for them.”

“If you sell them gambling services, where you take profits off the top like many of these new brokers who are particularly attracted to gamblers, I think it’s a dirty way of it is about making money, and I think that we are deceived into allowing it, ”Mr Munger continued.

Asked later on Wednesday where he saw too much in the financial system, Mr Munger said he was appalled “in the trade that new investors are attracting in with new forms of activity. break like Robinhood. ”

“I think this activity is very difficult,” he said. “I do not think civilization would have done better without it. ”

Write to Caitlin McCabe at [email protected] and Jason Zweig at [email protected]