The investment app Robinhood’s CEO Vlad Tenev is reportedly set to testify before the House Finance Services Committee which is chaired by Rep. Maxine Waters.
According to a report by Politico, sources close to the matter say the hearing will take place on February 18 and will give lawmakers a chance to get to the bottom of the chaos stirred by traders on the Robinhood app.
Last week, shares of GameStop and AMC skyrocketing to unprecedented levels as a throng of Robinhood users feverishly bought shares. Wealthy hedge funds who’d bet on those stocks failing lost millions of dollars causing an uproar on Wall Street.
Robinhood eventually shut down trading for particular stocks, and now Rep. Waters wants to know if there was collusion between Robinhood executives and Wall Street.
“I am concerned about whether or not Robinhood restricted the trading because there was collusion between Robinhood and some of the hedge funds that were involved with this,” Rep. Waters said in an interview on MSNBC.
Rep. Al Green, a Democrat from Texas, who chairs the Financial Services Oversight Committee is examining the involvement of large financial firms in the GameStop fiasco.
Green said he wants to know “whether or not there was something about this relationship that caused Robinhood to act, or did Robinhood act because of reasons associated with its liquidity.”
Some traders who cashed out in the ordeal weren’t new shareholders. Ten-year-old Jaydyn Carr made about $3,200 selling his shares he’d received back in 2018 as a Kwanzaa gift.
Small investors mobilizing on Robinhood has overall sparked a renewed conversation about the way the stock markets are run, and the risks involved.
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