RobinHood, Citadel, and Reddit CEOs Testify Before Congress
The halting of Gamestop shares by major trading platforms last month, mainly led by Robinhood, has continued to be a matter of hot debate on social media. The Reddit commenters’ implication, which impacted Gamestop shares trading by Robinhood and a few other players, was heavily felt by many traders, as many analysts have called for sanctions to all those involved in the unfortunate incident. In a new report from the U.S congress, the saga companies went to congress yesterday to testify about the incident last month.
The questioning at one point got heated
The U.S congress, via several spokespeople, confirmed to the general public and the affected retailers that they would look into the matter, a promise they have now fulfilled by inviting the CEOs of the trading halters for questioning yesterday. The majority of the congress members’ questions were tailored towards what happened, as they were keen to understand why Robinhood, who first halted trade of many stocks, led others to do the same.
During the question, Maxine Walters, the congress member in charge of financial services discussion, in a bid to ensure that integrity is not compromised, had specifically asked the company’s executive to either answer a yes or no when questioned. The reason behind this choice, as explained by the congress head of related financial matters, will not allow anyone to implicate themselves with answers that might land them in serious trouble.
The Congress member also wanted to avoid the scenario that followed Citadel’s CEO’s testimony, Ken Griffin, who was accused of wasting time by another congress member, Brad Sherman. Sherman got angry when Griffin started wasting time and twisting answers when the congressman wanted to know about his company’s payment order flow. Sherman, out of provocation, had also advised Griffin to join the contest for the senate position since his behavioral tendencies are compatible with that of the lawmakers.
Robinhood still have many legal issues to answer
The impacts of the traders’ actions on the Reddit group, WallStreetBets, who pumped shares prices of companies like Nokia, Gamestop, AMC, and Blackberry, continues to be discussed. Their actions led to an uprising of Gamestop shares prices from $20 to about $300. These singular actions led to losses for a few hedge funds. Many members of the WallStreetBets group like Keith Gill, who the congress also questioned, have turned their little money investments into millions of dollars.
Unfortunately, Robinhood, one of the stock trading firms, did not allow many traders to purchase the shares, citing several issues like too much transaction volume and market rush, etc. The actions also led others to halt trading, which negatively impacted the fortunes of many traders. Most of the retail traders have now either defected or suing Robinhood and co. However, Robinhood had tendered their apology, promising that it will handle the situation better in the future as the company prepares to go to court over the issue.