AOC urges US Congress to investigate Robinhood's GameStop freeze
Alexandria Ocasio-Cortez called on the US Congress to investigate trading app Robinhood over its GameStop freeze. Her tweet on Thursday called Robinhood's decision to block retail investors from purchasing GameStop stock "unacceptable". Ocasio-Cortez is a member of the House Financial Services Committee, which oversees the stock market. The incident struck a rare bipartisan chord when Republican Senator Ted Cruz retweeted her message saying, "Fully agree."
Incoming Senate Banking Committee Chairman Sherrod Brown announced plans to hold a hearing "on the current state of the stock market." Senator Brown said, "People on Wall Street only care about the rules when they're the ones getting hurt." Another progressive Democrat, Senator Elizabeth Warren also called for further regulation of the financial industry in light of the GameStop shorts.
Retail investors using Robinhood to trade shares reported the platform disallowed them from buying GameStop and other stocks. The app's rating on Google Play Store dropped to one star. The move attracted a class-action lawsuit in New York. More than 100,000 reviews from disgruntled users calling out Robinhood's market manipulation were removed by Google, in order to artificially improve the app's rating.
House Financial Services Chairwoman Maxine Waters agreed a Senate hearing is necessary. Waters said hedge funds have a "history of predatory conduct" that is entirely indefensible. She said a first step to reining in these practices would be a hearing convened to examine activity around GameStop stock and online trading platforms.
Ocasio-Cortez and Cruz rarely agree since the Capitol violence, but the bipartisan agreement may force the Securities and Exchange Commission and the Senate to crack down on rogue trading platforms and hedge fund billionaires' manipulative practices. Ocasio-Cortez rebuffed Cruz despite his gesture but expressed willingness to pursue the investigation into Robinhood with other Republicans. This development is unlikely to impact proceedings of the Senate hearing.