Robinhood faces scrutiny from AOC and different lawmakers after limiting GameStop trades

Robinhood faces scrutiny from AOC and different lawmakers after limiting GameStop trades


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GameStop has taken a roller-coaster experience on the inventory market this week because of a motion on Reddit. The spike in share value induced some investing companies and apps, together with Robinhood, to limit the buying and selling of GameStop inventory. (Robinhood has since reversed course on that call and will permit “restricted buys” of shares beginning Friday.) The restrictions induced a backlash amongst customers, and now some members of Congress are taking discover. 

Rep. Alexandria Ocasio-Cortez, a Democrat from New York; Rep. Rashida Tlaib, a Democrat from Michigan; and Sen. Ted Cruz, a Republican from Texas, all have been in settlement that there needs to be a listening to on Robinhood’s choice to limit the buying and selling of GameStop, AMC and different shares. The investing service stated in a weblog publish Thursday that it will permit solely the promoting of shares from Blackberry, Specific, Koss, Bare, Nokia, AMC and GameStop, because of the latest market volatility. 

“That is unacceptable,” Ocasio-Cortez tweeted Thursday. “We now must know extra about @RobinhoodApp’s choice to dam retail buyers from buying inventory whereas hedge funds are freely in a position to commerce the inventory as they see match. As a member of the Monetary Providers Cmte, I might assist a listening to if crucial.”

Ocasio-Cortez is taking to Twitch on Thursday, at 8:30 p.m. ET/5:30 p.m. PT to speak extra about Robinhood’s actions. 

Robinhood had no touch upon the tweets from the members of Congress. 

Sen. Sherrod Brown, a Democrat from Ohio and the incoming chairman of the Senate Committee on Banking, Housing, and City Affairs, tweeted Thursday that he’ll maintain a listening to concerning the present state of the inventory market. 

“Individuals on Wall Avenue solely care concerning the guidelines once they’re those getting damage,” Brown stated. “It is time for the SEC and Congress to make the economic system work for everybody.” 

New York Lawyer Common Letitia James launched an announcement Thursday saying she is conscious of the considerations concerning Robinhood and is reviewing the matter. 

The maker of the favored investing app is not the one firm to place restrictions on buying and selling GameStop inventory. Webull tweeted Thursday that it will additionally stop the shopping for of shares from the online game retailer in addition to from theater chain AMC and headphone producer Koss. SoFi added a warning to its GameStop and AMC web page saying that its clearing companion, Apex Clearing, will stop purchases of shares from the 2 firms. Each Webull and SoFi, like Robinhood, have since reversed their selections, Thursday afternoon. TD Ameritrade stated Wednesday that it will prohibit sure trades involving GameStop’s inventory

On Thursday, a class-action lawsuit was filed within the Southern District of New York in opposition to Robinhood for limiting inventory trades. The grievance says that the corporate “purposefully, willfully, and knowingly eradicating the inventory ‘GME’ from its buying and selling platform within the midst of an unprecedented inventory rise … disadvantaged retail buyers of the power to spend money on the open-market.”

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