In the Chamber, Congresswoman Maxine Waters, who chairs the Chamber’s Financial Services Committee, said she also intended to hold a hearing. “As a first step to containing these abusive practices, I will convene an audience to examine recent activity around GameStop (GME) shares and other impacted actions focusing on short selling, online trading platforms, gamification and their systemic impact in our capital markets and retail investors, ”she said in a statement.
The news from the hearings came after Robinhood was hit by a class action after restricting users – more than half of whom own GameStop shares – from trading on Thursday. The company said in an update that it would resume “limited purchases of these bonds” from Friday.
Separately, Fox Business reported that Robinhood was anticipating an SEC investigation that “involves market manipulation”. “The SEC somehow goes and looks at Reddit’s advice and tries to find out who’s promoting what, who’s promoting what and maybe sort of linking it to the negotiations,” Fox Business’ Charlie Gasparino said, citing “regulatory sources”. He added that such an investigation is probably an “impossible” task, since most Reddit users are anonymous.
A Robinhood spokesman did not immediately respond to a request for comment on possible investigations. And while the SEC did not officially comment on Robinhood, Reddit or GameStop, it issued a statement earlier this week saying it was “actively monitoring ongoing market volatility in the options and stock markets”.