A party congress was unified by outrage after the application Robin Hood and other securities retailers froze some individual transactions in response to a massive rise in GameStop and AMC stocks powered by internet chat rooms. Some hedge funds had bet heavily on the downfall of these companies, and the resulting volatility and Robinhood’s willingness to impose restrictions in a way that seemed to favor large investors and punish the smaller ones annoyed Democrats and Republicans.
“Totally agree” has tweeted Senator Ted Cruz, one of the most conservative senators, in response to tweet from representative Alexandria Ocasio-Cortez, a Democratic Socialist who scolded Robinhood for the decision to “block retail investors from buying shares while hedge funds can freely trade the shares they deem appropriate.”
House and Senate committee leaders responsible for overseeing the financial industry plan to hold hearings on Robinhood’s decision and the circumstances that led to the market changes.
“We need to deal with hedge funds whose unethical conduct has led directly to recent market volatility and we need to look at the market in general and how it has been manipulated by hedge funds and their financial partners to benefit- if others pay the price, ”he said. Maxine Waters, chair of the House Financial Services Committee.
Representative Patrick McHenry, the committee’s most prominent Republican, said in a statement that he had asked Waters to convene a hearing.
On Thursday afternoon, on Capitol Hill, Cruz called for transparency and said lawmakers are demanding to know why Robinhood had stopped trading shares defended on Reddit by WallStreetBets and other chat rooms.
Moderate Republican Sen. Pat Toomey called the freezing of retail investors “very disturbing,” but also raised concerns about how the trade frenzy would end. “By the way, for most it will end badly, that’s a bubble, it’s going to explode and it will end up collapsing the price,” Toomey said.
The chairman of the incoming Senate Banking Committee, Sherrod Brown, also said he plans to hold a hearing on the issue.
“American workers have known for years that the Wall Street system is broken. They’ve been paying the price. It’s time for the SEC and Congress to make the economy work for everyone, not just Wall Street. “, said his statement.
During a television interview Thursday, Sen. Elizabeth Warren pointed directly at the U.S. Securities and Exchange Commission, accusing the agency of not articulating rules and letting the stock market become a “casino.”
“We need an SEC that accelerates, that sets clear rules, and that they are willing to enforce those rules,” Warren said.
In late Wednesday, the SEC issued a statement saying it was “monitoring the volatility of the ongoing market” and would work with regulators to assess the situation.
On Thursday, during the White House press session, press secretary Jen Psaki referred reporters to the SEC statement and declined to comment further. On Wednesday, Psaki said members of the economic team, including Secretary Janet Yellen, were also monitoring the situation.
On Thursday evening, a Robinhood email to service users said it would allow “limited purchases” of GameStop and AMC titles on Friday.
Despite their common response to the actions of online business services, tensions between political parties persisted after the January 6 Capitol riots.
“I’m happy to work with Republicans on this issue where there are points in common, but I was almost murdered 3 weeks ago so you can choose this one,” Ocasio-Cortez wrote in a tweet in response to Cruz’s support for his stance on Robinhood. .