by Cameron Kerkes
At least two House Democrats are on board to hold a hearing on “Robinhood’s market manipulation,” Democratic Reps. Rashida Tlaib and Alexandria Ocasio-Cortez tweeted Thursday.
Companies such as GameStop, AMC, and Blackberry recently saw their ticker’s unable to trade on the popular investment platform Robinhood. The stock surge for companies such as Gamestop and AMC, boosted by a group on Reddit, has caused hedge fund managers who held short positions on those companies to lose billions, according to Yahoo Finance.
“This is beyond absurd. @FSCDems need to have a hearing on Robinhood’s market manipulation. They’re blocking the ability to trade to protect Wall St. hedge funds, stealing millions of dollars from their users to protect people who’ve used the stock market as a casino for decades,” Tlaib tweeted.
This is beyond absurd. @FSCDems need to have a hearing on Robinhood's market manipulation. They're blocking the ability to trade to protect Wall St. hedge funds, stealing millions of dollars from their users to protect people who've used the stock market as a casino for decades. https://t.co/CGkJxVfzkv
— Rashida Tlaib (@RashidaTlaib) January 28, 2021
“…as a member of the Financial Services Cmte, I’d support a hearing if necessary,” Ocasio-Cortez said in a series of tweets.
“Inquiries into freezes should not be limited solely to Robinhood. This is a serious matter. Committee investigators should examine any retail services freezing stock purchases in the course of potential investigations – especially those allowing sales, but freezing purchases,” Ocasio-Cortez said.
This is unacceptable.
We now need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit.
As a member of the Financial Services Cmte, I’d support a hearing if necessary. https://t.co/4Qyrolgzyt
— Alexandria Ocasio-Cortez (@AOC) January 28, 2021
“In light of current market volatility, we are restricting transactions for certain securities to position closing only, including $AMC and $GME,” Robinhood tweeted explaining their decision to freeze trades aside from sales of AMC and GameStop, as well as some others.
— Robinhood (@RobinhoodApp) January 28, 2021
Short selling is when an investor borrows shares from a broker at market price and promises to sell them back to the broker at a set date in the future. When the investor sells the shares that were borrowed, if the stock decreased in value he can collect the difference in the price of the stock from when he initially borrowed the shares, according to Investopedia.
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Cameron Kerkes is a reporter at Daily Caller News Foundation.