Five of the key players in the GameStop stock trading saga appeared before a congressional committee to answer questions about their role in January’s tumultuous market activity.
The House Committee on Financial Services is the first governmental body to call witnesses to testify after retail investors mobilised on Reddit and bought shares in retailer GameStop, sending its stock price rocketing.
Their action sent hedge funds with short positions looking for emergency bailouts and led the stock trading platform Robinhood to pull the plug on future trades of the stock by its users. The share price has since sunk back from a peak of $483 to $45.
At the hearing on Capitol Hill, lawmakers are questioning Robinhood CEO Vlad Tenev, Reddit CEO Steve Huffman, Citadel CEO Ken Griffin, Melvin Capital founder Gabe Plotkin, trader Keith Gill, known “Roaring Kitty”.
Ahead of the hearing, committee head Representative Maxine Waters said in a statement that they will take a hard look at the hedge fund industry’s “long history of predatory conduct”. The committee will also examine Robinhood’s decision to halt trading of GameStop and other “meme stocks”.
Welcome to our live coverage of the GameStop hearing in front of the House of Representatives’ financial services committee.
The chiefs of Robinhood, Reddit, Citadel, and Melvin Capital, are appearing in front of lawmakers to be grilled about the events surrounding the tumultuous events on the stock market in late January.
Robinhood CEO Vlad Tenev, Melvin Capital CEO Gabriel Plotkin, Reddit CEO and co-founder Steve Huffman, Citadel CEO Kenneth Griffin, and trade Keith Gill, also known as “Roaring Kitty”, will testify beginning at 12pm ET.
For those that need a refresher
Online traders have delivered a multibillion-dollar message to big investors but the situation raises important questions about short-selling, social media and the stock market, writes Ben Chapman
The halting of trading in GameStop by Robinhood led to legal action by users of the stock trading platform after they were told as the market opened on Thursday 28 January that they would only be able to sell their positions in several stocks.
Reddit-driven investment had seen stock price spike 700 per cent in just days
GameStop controversy made some strange political bedfellows
GameStop trading saw both progressive Democrats and populist Republicans brought together on the same side of an argument, cheering on the activist Redditor investors.
It was an odd moment of unity.
The controversy has made strange political bedfellows
Robinhood explained actions in full page newspaper ads
The platform claimed it suspended trading in certain stocks “to ensure it complied with deposit regulations”.
Tech start-up says it has 'worked for everybody since day one’ as lawmakers ask whether its trades posed conflicts of interest
The House hearing is now live
Chair Maxine Waters of California is giving her opening remarks outlining the scope of the hearing and introducing the witnesses.
- Vlad Tenev, Chief Executive Officer, Robinhood Markets, Inc.
- Kenneth C. Griffin, Chief Executive Officer, Citadel LLC
- Gabriel Plotkin, Chief Executive Officer, Melvin Capital Management LP
- Steve Huffman, Chief Executive Officer, Co-Founder, Reddit
- Keith Gill
- Jennifer Schulp, Director of Financial Regulation Studies, Cato Institute
Regulators will be heard from at subsequent hearings.
Roaring Kitty is ready for battle
Keith Gill, aka Roaring Kitty, is feeling feisty heading into the hearing.
Robinhood CEO up first with opening statement
Vlad Tenev says the intention of Robinhood was to open up the financial system to all Americans and democratise finance for all.
He says that contrary to some reporting, most of the platform’s users are in it for the long term and not for quick trades.
Rep Maxine Waters interrupted during his opening statement and demanded that he directly address the events around the GameStop debacle .
Rep Patrick McHenry argued that he should be able to say what he wants.
Mr Tenev says they do not answer to hedge funds and apologises to customers for the events around GameStop.
He thanks the millions of customers that continue to use the platform and says the system should move toward realtime settlement.
“Total value of our customers’ assets on Robinhood exceeds the net amount of money they have deposited with us by over $35 billion,” says Mr Tenev, adding that the restrictions on trading were brought in “to meet increased regulatory deposit requirements, not to help hedge funds. We don’t answer to hedge funds.”
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