A partisan congress was unified by outrage after the application Robinhood and other retail trading companies froze some individual transactions in response to a massive increase in GameStop and AMC stock powered by internet chat rooms. Some hedge funds bet heavily on the downfall of those companies, and the resulting volatility and Robinhood’s desire to impose restrictions in a way that seemed to favor large investors and punish the smallest annoyed Democrats and Republicans.
“Completely agree,” Senator Ted Cruz wrote on Twitter, one of the most conservative senators, in response to a tweet from Alexandria Ocasio-Cortez, a Democratic socialist who scolded Robinhood for deciding to “block retail investors from buying shares, while hedge funds are free to trade shares as they see fit.”
Leaders of the House and Senate committees responsible for overseeing the financial industry plan to hold hearings to analyze the Robinhood decision and the circumstances that led to the market changes.
“We need to deal with hedge funds whose unethical conduct has led directly to recent market volatility and we need to look at the market in general and how it has been manipulated by hedge funds and their financial partners to benefit themselves over time. what others pay the price, ”said Maxine Waters, chair of the House Financial Services Committee.
Representative Patrick McHenry, a senior Republican on the committee, said in a statement that he had asked Waters to call a hearing.
On Thursday afternoon, on Capitol Hill, Cruz called for transparency and said lawmakers are asking to know why Robinhood stopped trading shares promoted on Reddit by WallStreetBets and other chat rooms.
Moderate Republican Sen. Pat Toomey called the retail investor freeze “very disturbing,” but expressed concern about how the trade frenzy will end. “By the way, it will end badly for most, this is a bubble that will explode and end up falling in price,” Toomey said.
Sherrod Brown, chairman of the Senate Banking Committee, also said she plans to hold a hearing on the issue.
“American workers have known for years that the Wall Street system is broken. They paid the price. It’s time for the SEC and Congress to make the economy work for everyone, not just Wall Street,” his statement said.
During a television interview on Thursday, Senator Elizabeth Warren followed the US Securities Commission directly, accusing the agency of failing to articulate the rules and allowing the stock market to turn into a “casino”.
“We need an SEC to step up, to implement clear rules, and then they will be willing to enforce those rules,” Warren said.
Late Wednesday, the SEC issued a statement saying it was “monitoring ongoing market volatility” and would work with regulators to assess the situation.
At a White House press conference on Thursday, Press Secretary Jen Psaki sent reporters to the SEC statement and declined to comment further. On Wednesday, Psaki said members of the economic team, including Secretary Janet Yellen, are also monitoring the situation.
On Thursday night, an email from Robinhood to users of the service said it would allow “limited purchases” of GameStop and AMC titles on Friday.
Despite their joint response to the actions of online trading services, tensions between political parties remained after the riots in the January 6 Chapter.
“I’m happy to work with Republicans on this issue, where there are commonalities, but you almost killed me 3 weeks ago so you can leave it at that,” Ocasio-Cortez wrote in a tweet responding to support Cruz’s position on Robinhood. .