GameStop stock brings Robinhood, Reddit into spotlight during congressional hearing

Washington

WASHINGTON (NEXSTAR) — On Thursday, U.S. Rep. Maxine Waters (D-Calif.) and the House Financial Services Committee tackled the unprecedented events surrounding GameStop stock last month.

“This recent market volatility has put a national spotlight on institutional practices by Wall Street firms,” Waters said.

The investment company, Robinhood, and its CEO, Vlad Tene, came under fire for eventually allowing users to only sell, and not buy the stock.

“In an effort to meet increased regulatory deposit requirements, not to help hedge funds,” Tenev said.

Congresswoman Carolyn Maloney (D-N.Y.) says Robinhood lacked fundamental fairness for average investors.

“They were being treated differently than other market participants who could still buy and sell those same stocks,” Maloney said.

“What happened is unacceptable to us. To our customers, I’m sorry and I apologize,” Tenev said.

Congresswoman Ann Wagner (R-Mo.) does not want Democrats to use what happened as an excuse to force more regulations.

“To an industry that is already heavily-regulated and that will prevent people from participating in our capital markets.” Wagner said.

Lawmakers also questioned whether Reddit and the WallStreetBets community manipulated the market.

“We do believe that this community was well in the bounds of our own policies,” Reddit CEO Steve Huffman said.

Huffman and Reddit user Keith Gill say the hearing is an important step forward.

“It’s alarming how little we know about the inner workings of the market. And I am thankful this committee is examining what happened,” Gill said.

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