Lawyer Bob Frenchman, who specializes in finance and securities, argues that the SEC did not intervene because “it is not at all clear” that something illegal has happened.
Robinhood CEO Vlad Tenev was reportedly asked to testify on Capitol Hill amid the recent commercial turmoil unleashed by average investors.
The House’s Financial Services Committee convened a hearing for February 18 at 12 noon, Eastern Time, to address the recent market volatility.
The hearing, first reported by Politico, was formally announced by Rep. Maxine Waters, D-Calif., On Monday night.
“We must deal with hedge funds whose unethical conduct has directly led to recent market volatility and we must examine the market in general and how it has been manipulated by hedge funds and their financial partners to benefit while others pay the price,” Waters said. in a statement.
Waters’ announcement did not mention who the witnesses would be, although Politico said Tenev would be contacted.
A Robinhood spokesman did not return FOX Business’s request for comment.
ROBINHOOD, AMID CHAOS, RAISES US $ 3.4 BILLION IN TOTAL
Traders have been using the Robinhood app to cheat hedge funds that have bet – or opened – financially struggling companies like GameStop, AMC and Bed, Bath & Beyond. Although these Wall Street companies had bet that the prices of these battered companies would continue to fall, non-professional investors have teamed up through the social media platform Reddit to acquire shares.
The result was a massive increase in the stock prices of these companies – which caused hedge funds to lose money.
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Last Thursday, Robinhood limited access to stocks – such as GameStop – that day traders were combing, which attracted wide scrutiny.
Congressman Alexandria Ocasio-Cortez, DN.Y., classified the decision to suspend purchases as “unacceptable”.
Senator Elizabeth Warren, D-Mass., It was after Wall Street companies that she said they had treated the market as their personal “casino” for years.
The company then allowed negotiations to resume on Friday.