Senator Pat Toomey told CNBC on Tuesday that he welcomes stock trading apps that make investment more accessible, rejecting complaints from some brokers like Robinhood led to the so-called “gamification” of the stock market.
The Pennsylvania Republican made comments on “Squawk Box” ahead of the Senate Banking Committee hearing on Tuesday morning about retail investors and the GameStop commercial frenzy that started in January. Toomey is the graduate member of the committee.
“There is a lot of criticism about gamification … The idea of making the investment experience pleasant and easy is, in a way, a problem for some people. Not for me,” Toomey told CNBC.
Robinhood, a brokerage app that pioneered zero commission trading and popular with young investors, had its operations scrutinized even before the Reddit-fueled GameStop saga caught the attention of Wall Street earlier this year. The brokerage also saw millions of new users during the coronavirus pandemic, as people started buying and selling stocks while at home.
“The worst aspect of what they do is clearly the way they are gamifying the idea of investing,” Massachusetts Commonwealth Secretary William Galvin told CNBC in December after the securities regulator filed a complaint against Robinhood.
Robinhood has consistently rejected criticism about his investment approach and the user experience in his application. In a statement submitted to the House Financial Services Committee in February to a previous GameStop hearing, Robinhood co-founder and CEO Vlad Tenev said: “While we have made investments easier, we recognize that it is not a game.”
“I am confident that the easy-to-use interface allows customers to understand, control and direct their finances responsibly,” said Tenev in the statement.
Toomey said he liked how stock trading platforms like Robinhood created a new class of investors.
“My view is that the democratization of these markets has been fantastic. Zero commissions, extremely narrow offer [spreads] it means that retail investors can buy shares in a way they never have before. Being able to buy a fraction of a share, for example, “said Toomey.
The increase in Americans’ share of the stock market, Toomey said, is “really, really good.”