“Actually, we don’t know who all the players are in all this – if there’s big money on either side,” Warren Dana told State of the Union Sunday. “That’s why we need an SEC investigation.”
However, Wall Street also benefited from the electric growth of the GameStop stock. Its 1,600% growth this month has not been fueled exclusively by retail investors using free trading apps such as Robinhood. Hedge funds covering their bets and other deep-pocketed investors have contributed to rising stock prices.
She called Robinhood’s decision to turn the switch over and prevent users from buying GameStop in the middle of a “just wrong” trading session.
“He can’t try to help hedge funds at the same time he claims to help individual investors,” Warren said, acknowledging that he’s not sure if that’s what Robinhood does – there’s not enough information in an opaque market.
“Understand: what’s happening with GameStop is just a reminder of what’s been happening on Wall Street for years, years and years. It’s a fake game,” she said. “We need a market that is transparent, that is uniform and open to individual investors. It’s time for the SEC to give up and do its job.”
Warren said Wall Street and Corporate America have taken advantage of retail investors by buying back shares for years – artificially inflating the value of their stock prices – and by unfair arbitration clauses benefiting broker-dealers. She reiterated her call for an end to share buybacks and called for a more active and stronger SEC.
The SEC should “grow a backbone” and enforce its own rules, she said.
“The truth is hedge funds, many of the giant corporations love the fact that markets are not efficient,” she said. “They like being able to manipulate these markets because they get better returns and individual investors lose.”