Incoming Senate Banking panel chair to hold hearing on stock market amid GameStop controversy
The incoming chairman of the Senate Banking Committee said Thursday he would convene a hearing on the state of the stock market amid bipartisan concern over how major trading platforms have responded to viral rallies in certain stocks.
“People on Wall Street only care about the rules when they’re the ones getting hurt. American workers have known for years the Wall Street system is broken – they’ve been paying the price,” Brown said in a Thursday statement. “It’s time for the [Securities and Exchange Commission] SEC and Congress to make the economy work for everyone not just Wall Street. That’s why, as incoming Chair of the Senate Banking and Housing Committee I plan to hold a hearing to do that important work.”
Brown is the latest and most powerful lawmaker to call for a congressional probe into why Robinhood and other popular online trading applications stopped or limited sales of several stocks Thursday that exploded in value over the past week.
Shares of GameStop, theater chain AMC, BlackBerry and Nokia have risen dramatically over the past week thanks to a crusade led by a Reddit community of amateur traders against hedge funds, most of which have invested heavily in bets that those stocks would soon collapse.
That rally hit a massive speed bump Thursday when trading platforms popular among that Reddit forum either prevented users from buying more of those shares or limited their ability to take larger positions. While those platforms insisted they did so to protect customers from intense volatility, politicians in both parties have condemned them for blocking average users out of trades that larger firms were still able to make.
“We now need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit,” said Rep. Alexandria Ocasio-Cortez (D-N.Y.), a member of the House Financial Services Committee, in a tweet.
Ocasio-Cortez called for the Financial Services panel to investigate Robinhood and any other platforms that locked out users from buying popular shares.
Republican lawmakers such as Sens. Ted Cruz (Texas) and Mike Lee (Utah) and Rep. Ken Buck (Colo.) also called for congressional probes.
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