I don't know how you could possibly argue that when RH is preventing the purchase of a stock, but not the selling (Which pushes the stock price down), and trying to use the argument of "we're trying to protect you from volatility!"
> If Costco doesn't want to stock your favorite item any more do you get to sue because you still want to buy it?
This is such an apples-to-oranges comparison here that I really don't feel you're arguing in good faith.
> 2- If the customers had no idea of the legal documents they signed when they opened their accounts, their bad, not the broker.
As others have said, EULA doesn't trump the law.
> 3- Certainly not retail investors (who are not the people doing this stuff).
Either I'm misunderstanding what you're saying here, or you are 100% incorrect. It is absolutely the retail investors that are buying the GME stock and doing this.
> 4- First off, the shorts are done
We don't know this yet.
> Second, the brokers are protecting themselves from default on margin loans as well as the headache and aggravation of closeouts when 'traders' moan about the fills.
Defaulting on margin loans is prevented by issuing a margin call. Some traders are moaning about their GME being liquidated because they bought on margin while going all-in on GME, but even on WSB, most traders understand that's how margin works.
> 5- Why on earth should the Biden administration go to bat for a retail trading mob?
For the same reason Ted Cruz is. RH is impeding the free market. It's pretty crazy right now. Ted Cruz, AOC, Ben Shapiro, and Donald Trump Jr are all upset with RH right now, though for different reasons. The leftists are upset that the hedge fund managers are pissed that the poors are beating them at their game, while the right is upset that RH is interfering with the free market.
> 6- Shorts are not only necessary for a market to function well
If it was merely a matter of investors being able to say "I think this company is going to fail, so I'm going to short it", then yes. But then that quickly creates extremely perverse incentives. Now, it becomes "I have invested my money into the failure of this company, so I'm going to short it even more and publish articles about how this company has no future."
GameStop got a new CEO and had a path to recovery, and the hedge funds didn't like that since they were already shorting, so they doubled-down on the shorting. The funds are using their money to kill a company. While this is technically legal, I think it's incredibly immoral and unethical.