That connection is like 3 degrees of separation at best, though. Robinhood sells order flow to a number of market makers, one of which is Citadel Securities [1]. Citadel Securities is part of the Citadel group, which consists of a hedge fund (Citadel LLC) and a market making firm (Citadel Securities LLC) [2]. While both companies are owned by Ken Griffin and share many resources, they are split by a "Chinese Wall" [3] to prevent any conflict of interest between both sides of the firm. They also have different CEOs, management, employees, infrastructure, etc. as a result of this. Now, Citadel (the hedge fund) has invested $2 billion into Melvin Capital, which is one of the firms central to the whole issue [4]. Yet Melvin Capital has already closed its position in GME [5], which means that they no longer have a vested interest in the performance of GME.
There are several glaring problems with the theory that Citadel is pushing for Robinhood to ban buying GME for financial motives:
1. Robinhood has NO relationship with Citadel LLC
2. Everybody knows about the theoretical conflict of interest between Citadel/Citadel Securities so it is incredibly unlikely that Citadel Securities would risk doing anything to help Citadel in such a high profile scenario (i.e. the SEC/FINRA would be able to find out this kind of thing very quickly and very easily)
3. Citadel has no financial motive to stop trading of GME, because Melvin Capital has no financial motive to stop trading of GME
4. If it was as simple as trying to profit off of GME going down, why would they bother halting trades on other securities (AMC, BB, NOK, BBBY, etc.)?
This article does a really good job at explaining the situation (much better than I can do) [6]
[1] https://cdn.robinhood.com/assets/robinhood/legal/RHF%20SEC%2...
[2] https://www.chicagobusiness.com/article/20170203/NEWS01/1702...
[3] https://www.investopedia.com/terms/c/chinesewall.asp
[4] https://www.wsj.com/articles/citadel-point72-to-invest-2-75-...
[5] https://www.reuters.com/article/us-gamestop-melvin-idUSKBN29...
[6] https://finance.yahoo.com/video/heres-why-robinhood-restrict...
There are several glaring problems with the theory that Citadel is pushing for Robinhood to ban buying GME for financial motives:
1. Robinhood has NO relationship with Citadel LLC
2. Everybody knows about the theoretical conflict of interest between Citadel/Citadel Securities so it is incredibly unlikely that Citadel Securities would risk doing anything to help Citadel in such a high profile scenario (i.e. the SEC/FINRA would be able to find out this kind of thing very quickly and very easily)
3. Citadel has no financial motive to stop trading of GME, because Melvin Capital has no financial motive to stop trading of GME
4. If it was as simple as trying to profit off of GME going down, why would they bother halting trades on other securities (AMC, BB, NOK, BBBY, etc.)?
This article does a really good job at explaining the situation (much better than I can do) [6]
[1] https://cdn.robinhood.com/assets/robinhood/legal/RHF%20SEC%2...
[2] https://www.chicagobusiness.com/article/20170203/NEWS01/1702...
[3] https://www.investopedia.com/terms/c/chinesewall.asp
[4] https://www.wsj.com/articles/citadel-point72-to-invest-2-75-...
[5] https://www.reuters.com/article/us-gamestop-melvin-idUSKBN29...
[6] https://finance.yahoo.com/video/heres-why-robinhood-restrict...