Kristina Partsinevelos, of FOX Business, analyzes what is happening with the brokerage app Robinhood and how users reacted to the company that limited trading this week.
The struggling mobile brokerage platform Robinhood is trying to hire a lobbyist to defend its interests on Capitol Hill, ahead of likely Congressional hearings on its involvement in the GameStop stock trading controversy.
Robinhood posted a list on Friday for a “federal affairs manager” in the Daybook, a job board for public policy professionals. The listing went live as executives at the popular day-trading app face bipartisan criticism from lawmakers over their decision to restrict transactions involving GameStop shares and other actions taken by retail investors.
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“This function will focus on federal defense and government affairs related to legislative and regulatory issues and will report to our Deputy General Counsel for Regulatory Litigation, Inspection and Investigations and Government and Regulatory Affairs,” says the job description.
It is unclear whether the latest post was directly related to requests for Congress to hold hearings on how Robinhood handled the situation and the circumstances that led to unprecedented volatility for a series of actions this week. A post with the same title on the job board In fact, it has been on the air for more than 30 days.
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Robinhood representatives did not immediately respond to a request for additional comments on the job posting.
The Democratic heads of the Senate Banking Committee and the House’s Financial Services Committee have indicated that they will move forward with hearings on GameStop’s commercial frenzy. Meanwhile, the United States Securities and Exchange Commission has pledged to “closely review actions taken by regulated entities that may harm investors or unduly inhibit their ability to trade certain securities”.
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A handful of shares favored by the Reddit group “WallStreetBets” soared in value this week as users bought shares. The increase created “small pressure” on hedge funds that were betting against stocks, which included GameStop, BlackBerry and AMC Entertainment, forcing them to buy more shares to cover their losses.
Critics of Robinhood and other platforms that enacted trade restrictions argued that they did so at the behest of Wall Street hedge funds at risk of insolvency. The platforms denied these claims and said the restrictions were intended to reduce the risk.