Lawmakers announce hearings on GameStop and online trading platforms

The GameStop short squeeze saga caught the attention of Congress Thursday morning and that buzz is already panning out into hearings on the topic.

Rep. Maxine Waters (D-CA), chairwoman of the House Committee on Financial Services, announced plans for an investigation into the situation, pointing to a history of “predatory conduct” from hedge funds.

Waters didn’t call out Robinhood or any other trading services by name, but did note that a future hearing would focus on the systemic financial impact of short selling, “gamification” and online trading platforms. The hearing date is not yet set.

“Addressing that predatory and manipulative conduct is the responsibility of lawmakers and securities regulators who are charged with protecting investors and ensuring that our capital markets are fair, orderly, and efficient,” Waters said.

In the Senate, incoming Senate Banking Chairman Sherrod Brown announced his own plans for a hearing on the “current state of the stock market” in light of recent events. “People on Wall Street only care about the rules when they’re the ones getting hurt,” Brown said.

Earlier on Thursday, Democratic Reps. Rep. Rashida Tlaib, Alexandria Ocasio-Cortez and Ro Khanna all condemned the startup Robinhood for halting some trades in the midst of the Reddit retail investor-led volatility. Morgan Stanley-owned E-Trade followed suit.

Texas Republican Senator Ted Cruz echoed Democrats’ concerns over Robinhood’s actions, signaling that even in the midst of pandemic relief negotiations and an impeachment trial that lawmakers on both sides of the aisle still have an appetite for dragging tech in for questioning.

And apparently it’s not just Congress. New York Attorney General Letitia James also issued a short statement Thursday noting that her office is “aware of concerns raised regarding activity on the Robinhood app” and would be reviewing the situation.