Sen. Pat Toomey told CNBC on Tuesday that he welcomes stock trading programs that make investment seem more accessible, and rejects complaints from some that brokers like Robinhood have led to the so-called “gamification” of the stock market.
The Pennsylvania Republican made the remarks about ‘Squawk Box’ ahead of Tuesday morning’s Senate Banking Committee hearing on retail investors and the GameStop trade chase that began in January. Toomey is the rank member in the committee.
“There’s a lot of criticism about gamification. … The idea of making the investment experience enjoyable and easy is somehow a problem for some people. Not for me,” Toomey told CNBC.
Robinhood, a brokerage app that did pioneering work without commission and popular with young investors, scrutinized its operations before the RedStit-inspired GameStop saga caught Wall Street’s attention earlier this year. The broker also saw millions of new users during the coronavirus pandemic when people started buying and selling at home.
“The worst aspect of what they clearly do is the way they play the idea of investment,” Massachusetts Secretary of State William Galvin told CNBC in December after the security regulator filed a complaint against Robinhood.
Robinhood has consistently rejected criticism of his approach to investing and the user experience on his app. In testimony submitted to the House Financial Services Committee in February for an earlier GameStop trial, Robinhood co-founder and CEO Robinhood said: “While we have facilitated investment, we acknowledge that it is not a game. . “
“I am confident that the easy-to-use interface will enable customers to understand, manage and manage their finances in a responsible manner,” Tenev also said in the testimony.
Toomey said he appreciates how stock trading platforms like Robinhood have created a new class of investors.
“My opinion is that the democratization of these markets was fantastic. Zero commissions, extremely narrow supply [spreads] means retail investors can buy stocks in a way they have never been able to do before. For example, to be able to buy a fraction of a share, ‘Toomey said.
Toomey’s increasing participation of Americans in the stock market is “really very, very good.”