GameStop Short Squeeze Saga Thursday morning attracted the attention of Congress And that discussion is already coming up in the hearing on the subject.
Rep. Maxine Waters (D-CA), chairman of the House Committee on Financial Services, announced plans to investigate the situation, pointing to a history of “predatory conduct” from hedge funds.
Waters did not call Robinhood or any other trading services by name, but noted that future hearings would focus on lower sales, “gamification” and the systemic financial impact of online trading platforms. A date for hearing is not yet set.
“Addressing that predatory and manipulative conduct is the responsibility of lawmakers and securities regulators who are charged with protecting investors and ensuring that our capital markets are fair, orderly and efficient,” Waters said.
In the Senate, incoming Senate Banking President Sherrod Brown Announced its plans for a hearing on “the current state of the stock market” In light of recent events. Brown said the people of Wall Street only care about the rules when they are hurting.
Earlier on Thursday, Democratic Reps. Repsida Talib, Alexandria Ocasio-Cortez and Ro Khanna All condemned Startup Robinhood To prevent some trades in the midst of reddit retail investor-led volatility. E-Trade, owned by Morgan Stanley, followed suit.
Texas Republican Senator Ted Cruz echoed Democrats’ concerns over Robinhood’s actions, hinting that even in the midst of pandemic relief negotiations and impeachment trials, lawmakers on both sides still have the hunger to pull techniques for questioning.
And clearly it is not just Congress. New York Attorney General Letitia James also released a short statement Thursday stating that her office is “aware of concerns about activity on the Robinhood App” and will review the situation.