Congress announces hearings on stock market in light of Robinhood vs. Reddit battle

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Legislators are responding quick to the insanity surrounding GameStop and AMC shares and the hedge funds promoting them quick.

On Thursday, Chairwoman of the Home Monetary Providers Committee Maxine Waters introduced a coming listening to on short-selling. Sherrod Brown, the incoming chairman of the Senate Banking Committee, equally known as for a reexamination of inventory market guidelines. 

Quick-selling has been the subject of widespread controversy as the past two days have seen wild volatility for certain securities, especially Gamestop. Retail traders, communicating via Reddit and buying on Robinhood, have been busy buying up GME in the face of soon-to-expire short positions from several major hedge funds.

Earlier on Thursday, Robinhood and a number of other platforms aimed at retail investors cancelled the buying of GME in what many have been calling unfair collusion with the hedge funds in query. Waters mentioned:

“I’ll convene a listening to to look at the current exercise round GameStop (GME) inventory and different impacted shares with a deal with quick promoting, on-line buying and selling platforms, gamification and their systemic affect on our capital markets and retail buyers.” 

Alexandria Ocasio-Cortez and Rashida Tlaib, who each sit on the Home Monetary Providers Committee, each introduced their agency opposition to Robinhood’s motion, with AOC calling for a listening to as effectively.

Brown expressed an analogous sentiment in his announcement: “Folks on Wall Avenue solely care in regards to the guidelines after they’re those getting harm.” 

Robinhood has already been within the authorized scorching seat for its apply of rerouting orders to market makers that paid the agency again for the enterprise. It settled charges with the Securities and Exchange Commission for $65 million. 

Thursday’s market chaos appears to have drawn sufficient consideration to benefit a sea change in securities legal guidelines as they apply individually to retail and institutional buyers.