The House Financial Services Committee is holding a hearing to assess the implications of the trading frenzy that took place less than 10 days ago when GameStop and other short shares rose to heights and fell to depths after posts appeared on a Reddit forum called Wall Street Bets.
A preliminary plan, obtained by The Hill, says that the financial hearing will be held on February 18. It will consist of two panels:
- Panel 1 will have government and industry investment regulators.
- Panel 2 will have businesses and investors who have a connection or contributed to the chaos in the stock market last week.
The first panel is expected to include representatives from the Securities and Exchange Commission (SEC) as well as the Financial Industry Regulatory Authority (FINRA) which is a self-funded internal regulator. The clearing house used by Robinhood – the Depository Trust and Clearing Corp. or the DTCC would also be in a panel as it was used by the platform to finalize stock transactions. There may be additions or deletions in this panel.
The second panel will have representatives from Robinhood including its CEO Vlad Tenev, a Reddit executive and a few representatives from financial industry trade groups.
The volatility of the market, and its speculative activities and alleged gambling of stocks created a frenzy and saw huge highs and abysmal lows. This has come to attention of lawmakers and the House.
Last week Financial Services Committee Chairwoman Maxine Waters D-Cal. had said that the House would look into the recent unprecedented activity that had taken place around GameStop (GME) shares and a few other stocks. It would also focus on the systemic impact of short selling, online trading platforms and gamification on U.S. capital markets and retail investors.
She is looking for the following to happen:
- Tenev the CEO of Robinhood needs to testify
- Representatives from Reddit and GameStop need to testify
- Keith Gill, supposedly the Reddit trader behind the GameStop rally needs to testify
Spokespersons for chairwoman Maxine Waters and Rep. Patrick McHenry, a top Republican from N.C. and a Financial Services panel member declined to comment when asked for a response by The Hill. Representatives from Robinhood also did not respond to enquiries.
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