Especially you cannot advertise yourself as a service that traditionally keeps your stocks safe, then have in your contract that they will do whatever they want with your stocks.

It's legal grey area, so a judge might allow it, but typically standard contracts must have expected provisions or else they must make the changes in expectations very apparent.

My guess is that RH will argue that it is a mutual fund, not a brokerage firm. And they will get crushed spectacularly by the courts. I have a feeling the courts may pierce the veil on this one based on the amount of publicity. People want metaphorical blood, and the political capital on the opposing side is weak. Expect to see the class action suit dig into the communications of Citadel. This one's either going to be a doozy or it's going to add kindling to the fire raging against the oligarchy.