The head of trading app Robinhood and Wall Street hedge fund managers on Thursday fielded a barrage of questions in the U.S. Congress about their role in the GameStop trading frenzy, at times being cut off by irate lawmakers.
This report produced by Lisa Bernhard.
MAXINE WATERS: “I don’t have time, I just need a yes or no answer” to Robinhood CEO Vlad Tenev Wall Street hedge fund managers and the CEOs of Robinhood and Reddit were among those grilled by U.S. lawmakers Thursday about the recent Reddit-fueled trading frenzy that sent shares of GameStop soaring.
But amid the often fiery exchanges and finger pointing, the most clarity may have come from Reddit user Keith Gill - who promoted his investment in GameStop on social media – and who is otherwise known as YouTube streamer Roaring Kitty.
“A few things I am not.
I am not a cat.
I’m not an institutional investor.
Nor am I a hedge fund.
(Flash) I am just an individual whose investment in GameStop and posts on social media were based upon my own research and analysis." He’s one of five men at the center of the saga, which roiled Wall Street in January, prompting probes by several federal and state agencies.
Billionaire Republican mega-donor and Citadel CEO Ken Griffin was among those who defended their businesses to the Democratic-led House finance committee, which probed how Reddit users trading on retail platforms such as Robinhood squeezed hedge funds that had bet against shares of GameStop and other companies.
Griffin, majority owner of Citadel Securities, a Robinhood market maker, was castigated for evading his question about whether market-makers provide the same prices to all brokers.
GRIFFIN: “The Robinhood order comes from a community of traders who tend to trade in smaller size….” REP.
BRAD SHERMAN: “That isn’t my question, sir!
You’re abating my question by making up other questions!” The Reddit rally drove massive volatility in GameStop and other shares, prompting the post-trade “clearing” houses that guarantee trades to call for billions of dollars in extra collateral from Robinhood and other retail trading platforms. In response, Robinhood and other platforms suspended buying in GameStop and other affected stocks on January 28th.
Lawmakers from both parties were outraged and questioned if the trading platforms were siding with hedge funds over retail investors – something Robinhood CEO Vlad Tenev denied.
TENEV: “We don’t answer to hedge funds.
We serve the millions of small investors who use our platform every day to invest.” Tenev said the situation would have been "significantly worse" had Robinhood not suspended buying.
Speaking of which, buyers briefly scooped up GameStop shares on Thursday, reversing the stock’s morning losses, after Gill – aka Roaring Kitty - said he remained bullish about the stock following its recent rally and selloff.
Behind him while he spoke was a poster of a kitten with the caption “Hang in there!” - an apparent message to fellow GameStop investors.
