Robinhood, Melvin Capital, Citadel executives expected to testify in Congress on GameStop turmoil: sources By Svea Herbst-Bayliss, Pete Schroeder 2 MIN READ (Reuters) - Executives from Robinhood, Melvin Capital and Citadel Securities are expected to testify before a House panel at a Feb. 18 hearing exploring trading turmoil in GameStop Corp and related stocks, said two sources familiar with the matter. The House Financial Services Committee is examining how an apparent flood of retail trading drove certain stocks to extreme highs, squeezing hedge funds like Melvin that had bet against those shares. A committee spokesman did not respond to a request for comment, and a full witness list for the hearing has yet to be made public. Spokespeople for the companies declined to comment. The hearing is the first of what could be several Washington-driven probes into what happened in the stock market to kick off 2021. The three companies have been at the center of the GameStop saga. Robinhood emerged as both a popular and accessible retail trading platform, but drew criticism during the frenzy after it temporarily handcuffed trading in GameStop and other viral stocks as the firm tapped credit lines. Robinhood’s commission-free trading model also put a spotlight on Citadel Securities, which accounts for over 20% of all U.S. equities volume and roughly 39% of all U.S.-listed retail volume, according to its website. Citadel Securities’ heft has raised questions over the company’s market power, including business arrangements where the company and competitors pay brokers like Robinhood for order flow. The GameStop surge resulted in massive losses for Melvin Capital, after the hedge fund bet the retailer’s stock price would tumble. The fund, founded by Gabe Plotkin in 2014, began the year with $12.5 billion in assets but lost 53% in January as retail traders ganged up on hedge funds.
The House Financial Services Committee is examining how an apparent flood of retail trading drove certain stocks to extreme highs, squeezing hedge funds like Melvin that had bet against those shares. What a fucking joke. They SHOULD be examing how do we allow brokers/agents to carry on business when they have a CONFLICT of INTEREST! Resulting in a rigged market. Of course it was rigged against the retail client, because there is a CONFLICT OF INTEREST. Robinhood etc. are not going to bite off the hand that feeds them (order flow to Citadel, etc.). So guess who gets shafted here? The retail client!
Expect lots of sob stories: I lost $19 billion because of DFV and those evil retail traders ganging up on me! Waahhh Wahhhh!! I was supposed to be reaping all the profit while I drive this company to the ground but now these retail traders came along and started buying and now I lost all these money.. Waaahhh Waahhhhh! They shouldn't be allowed to do this. Retail traders do not have as much money like us so they shouldn't be allowed to compete with us and even win... We should be the only ones who are allowed to win. Waaahhh Waaahhh!!! This is unfair!!! Make some laws to make them stop!! I donated to your campaigns!! Waahhh Waaahh!! Congressmen: You do realize an efficient market is supposed to be a zero-sum game? And one is not supposed to win all the time?? Sob story: But I am never supposed to be losing. It's the retail traders who are always supposed to lose... That's how the market works. Waaahhh Waaahhh!!
and here we go for those of you who thought nothing was going to happen LOL GameStop Mania Is Focus of Federal Probes Into Possible Manipulation Federal prosecutors and regulators are investigating whether market manipulation or other types of misconduct fueled the rapid rise last month in prices of stocks such as GameStop and AMC Entertainment Holdings, according to people familiar with the matter. https://www.wsj.com/articles/gamest...le-manipulation-11613066950?mod=djemalertNEWS The Justice Department’s fraud section and the San Francisco U.S. attorney’s office have sought information about the activity from brokers and social-media companies that were hubs for the trading frenzy, the people said. Prosecutors have subpoenaed information from brokers such as Robinhood Markets Inc., the popular online brokerage that many individual investors used to trade GameStop and other shares, the people said. ... In addition to the probe by the Justice Department, the Commodity Futures Trading Commission is examining similar trading, the people said. The CFTC has opened a preliminary investigation into whether misconduct occurred as traders, including those coordinating on Reddit, targeted silver futures and the largest exchange-traded fund tied to silver, the iShares Silver Trust,SLV 0.08% one of the people said. The Wall Street Journal has reported that the Securities and Exchange Commission is reviewing the trading frenzy as well. The SEC and CFTC are civil regulators. The burden of proof in a regulatory enforcement action is lower than in a criminal case, which the Justice Department would bring.
What kind of brokerage records are going to show that retail investors "manipulated" the stock price? By buying the stock? LOL Last time I checked, buying a publicly-traded stock is still legal. And it is also legal to buy a stock after visiting a public message board and talking to their friends. They are going to make that illegal now??? Buying a stock after discussing it with your friends? LOL
Ya I'm not sure how far they can go with that... It's not illegal to get join your buddy's in on a trade...at least not yet. Lol.