Sen. Pat Toomey told CNBC on Tuesday that he welcomes stock trading apps that make investing seem more accessible, dismissing complaints from some that brokers like Robinhood have led to the so-called “gamification” of equity market.
The Pennsylvania Republican made comments on “Squawk Box” ahead of the Senate Banking Committee’s Tuesday morning hearing on retail investors and the GameStop trading frenzy that began in January. Toomey is the ranking member on the committee.
“There’s a lot of criticism about gamification. … The idea that you make the investment experience enjoyable and easy is somehow a problem for some. Not for me,” Toomey told CNBC.
Robinhood, a brokerage app that pioneered zero-commission trading and is popular with young investors, examined its operations even before the Reddit-powered GameStop saga caught Wall Street’s attention. earlier this year. Brokerage also saw millions of new users during the coronavirus pandemic when people started buying and selling stocks while they were at home.
“The worst aspect of what they do is clearly the way they play 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 its investment approach and user experience in its application. In testimony before the House Financial Services Committee in February for a previous GameStop hearing, Robinhood co-founder and CEO Vlad Tenev said, “While we have facilitated the investment, we recognize that it is not a game. “.
“I’m sure the easy-to-use interface allows customers to understand, control and manage their finances in a responsible way,” Tenev also told the witness.
Toomey said he appreciated how stock trading platforms like Robinhood have created a new class of investors.
“My point is that the democratization of these markets has been fantastic. Zero commissions, extremely narrow bid supply [spreads] it means retail investors can buy shares in a way they never could before. Being able to buy a fraction of a share, for example, ”Toomey said.
The increase in American stock market share, Toomey said, is “really very, very good.”