A biased Congress is united by outrage at the app Robin Hood and other retail stock trading firms froze individual trading in response to a massive increase in GameStop and AMC stock fueled by internet chat rooms. Some hedge funds have been betting big on the downfall of the companies, and the consequent volatility and willingness of Robinhood to impose restrictions in a way that seems to benefit the big investors and punish smaller ones, the Democrats and the Republicans seemed to like.
“Agree completely,” Senator Ted Cruz tweeted, one of the most conservative senators, in response to a tweet from representative Alexandria Ocasio-Cortez, a Democratic socialist who reprimanded Robinhood for deciding to “prevent investors from buying shares while hedge funds are freely able to trade the shares as they see fit.”
The leaders of the House and Senate committees responsible for overseeing the financial industry plan to hold hearings on Robinhood’s decision and the circumstances that led to the market change.
“We need to deal with hedge funds whose unethical behavior has directly led to the recent volatility in the market, and we need to examine the market in general and how it has been manipulated by hedge funds and their financial partners to benefit themselves while others pay the price. , “he said. Maxine Waters, chair of the House Financial Services Committee.
Representative Patrick McHenry, the Republican on the committee, said in a statement that he had asked Waters to stand trial.
Cruz called for transparency on Capitol Hill on Thursday afternoon, saying lawmakers are demanding to know why Robinhood stopped trading the shares that WallStreetBets and other chat rooms are campaigning on Reddit.
Moderate Republican Senator Pat Toomey called the freezing point for retail investors “very disturbing” but also expressed concern about how the trade frenzy would end. “By the way, it’s going to end badly for most, it’s a bubble, it’s going to burst and it’s going to collapse eventually,” Toomey said.
Incoming chairman of the Senate Banking Committee, Sherrod Brown, also said he plans to hold a hearing on the issue.
“American workers have known for years that the Wall Street system has been broken. They are paying the price. It is time for the SEC and Congress to make the economy work for everyone, not just Wall Street,” he said in a statement.
During a televised interview on Thursday, Senator Elizabeth Warren directly addressed the U.S. Security and Exchange Commission, accusing the agency of failing to articulate rules and turning the stock market into a “casino.”
“We need an SEC that will act, that will put clear rules in place and then be prepared to enforce those rules,” Warren said.
Late Wednesday, the SEC issued a statement saying it was monitoring ongoing market volatility and working with regulators to assess the situation.
The press secretary, Jen Psaki, referred to the SEC statement during the press briefing of the White House on Thursday and did not want to comment further. On Wednesday, Psaki said members of the economic team, including Secretary Janet Yellen, were also monitoring the situation.
On Thursday night, an email from Robinhood to users of the service said it would allow ‘limited purchases’ of GameStop and AMC bonds on Friday.
Despite their general reaction to the actions of online trading services, tensions between the political parties remained after the riots on 6 January.
“I’m glad to work with Republicans on this issue where there is a common issue, but you had me killed almost 3 weeks ago so you could voice this one,” Ocasio-Cortez wrote in a tweet in response to Cruz’s support for her position on Robinhood. .