AOC and lawmakers call for Robinhood hearings on freezing GameStop shares

The price of shares for the video game retailer GameStop continued to skyrocket Friday after investment app Robinhood lets users buy shares after the setback on the previous restrictions on purchases. Legislators have taken note of these restrictions and are calling for congressional action against the company.

Rep Alexandria Ocasio-Cortez, a Democrat from New York; Rep. Rashida Tlaib, a Democrat from Michigan; and Senator Ted Cruz, a Texas Republican, all agreed that there would be a trial over Robinhood’s decision to restrict trading in GameStop, AMC and other stocks. The investment service said in a blog post on Thursday that it would only allow the sale of shares of Blackberry, Express, Koss, Naked, Nokia, AMC and GameStop due to the recent volatility in the market. It turned around on Thursday after the markets closed and allowed app users to buy shares on Friday, although it does not allow the purchase of fractional shares from the above companies.

“This is unacceptable,” Ocasio-Cortez said tweeted Thursday. “We now need to know more about @ RobinhoodApp’s decision to ban retail investors from buying shares, while hedge funds are freely able to trade the shares as they see fit. . “

Robinhood did not comment on the tweets from members of Congress.

Sen. Sherrod Brown, an Ohio Democrat and incoming chairman of the Senate Committee on Banking, Housing and Urban Affairs, tweeted On Thursday, he will hear about the current state of the stock market.

People on Wall Street only care about the rules if it’s them who get hurt.

It’s time for the SEC and Congress to make the economy work for everyone.

As Incoming Chairman of the @SenateBanking Committee, I will hear about the current state of the stock market. https://t.co/V9Hzp26jRT

– Sherrod Brown (@SenSherrodBrown) 28 January 2021

“People on Wall Street only care about the rules when they get those who get hurt,” Brown said. “It’s time for the SEC and Congress to make the economy work for everyone.”

Rep. Paul Gosar, a Republican from Arizona, sent a letter to the Justice Department on Thursday asking him to an immediate investigation into Robinhood and Citadel Securities, a high-frequency trading company that generates Robinhood nearly half of its revenue, according to a Bloomberg report.

New York Attorney General Letitia James issued a statement on Thursday saying she was aware of the concerns regarding Robinhood and was reviewing the case.

NEW: NY AG Letitia James says she’s reviewing issues: Robinhood, the stock trading app that blocked the possibility of buying GameStop shares today. pic.twitter.com/iQiXCVanOR

– Jon Campbell (@JonCampbellGAN) 28 January 2021

The U.S. Securities and Exchange Commission said Friday it will “review actions taken by regulated entities that could harm investors or otherwise impair their ability to trade certain securities. “The agency also monitors the volatility of certain stocks.

Robinhood is not the only company that places restrictions on the trading of GameStop shares. Webull tweeted on Thursday that it would also prevent the purchase of shares at the video game retailer as well as the theater chain AMC and the headphone manufacturer Koss. SoFi added a warning on its GameStop and AMC page, saying its clearing partner, Apex Clearing, would prevent the purchase of shares from the two companies. Both Webull and SoFi, like Robinhood, have since reversed their decisions since Thursday afternoon. TD Ameritrade said on Wednesday that it would restrict certain transactions that include GameStop shares.

A class action lawsuit was filed against Robinhood in the Southern District of New York on Thursday for restricting shares. The complaint states that the company “deliberately, willfully and knowingly removed the ‘GME’ share from its trading platform amid an unprecedented share increase … deprived retail investors of the ability to invest in the open market.”