Vlad Tenev, founder of the retail stock trading app Robinhood, told a House committee Thursday, “The financial system should be open to everyone,” Including insane buyers from GameStop and AMC Entertainment by one Reddit chat room were flogged

He apologized profusely for a funding rule that forced the app to block stock purchases – a temporary restriction that was the focus of the five-hour hearing today, with stocks falling and some Robinhood users losing their shirts

Tenev testified before the House Financial Services Committee, along with the CEO of a hedge fund that killed GameStop (Kenneth Griffin, Citadel LLC) and another who lost a lot on a brief press (Gabriel Plotkin, Melvin Capital ) Individual investor Keith Gill, known as Roaring Kitty in his YouTube videos and Reddit posts, bought GameStop and promoted it in Reddit’s colorful WallStreetBets chat room, agreeing with lawmakers that the stock was “getting a little bit on its own”, when it hit $ 483 – after a 52-week low of $ 257 gill swore, however, that his “contributions didn’t result in billions of dollars pouring into GameStop stock. He’s made money but feels too late for investors for that.” got out

Reddit CEO and Co-Founder Steve Huffman rounded out the list of witnesses, saying WallStreetBets “may look sophomoric or chaotic on the outside, but the fact that we’re here today means we have managed to address important questions To provide fairness and opportunity in our financial system I am proud that they use Reddit. He said no bots or foreign agents were focused on buying GameStop, AMC Entertainment or any other stock and see nothing wrong with anonymous users exchanging investment advice / p>

The moral / financial principle was the legislature’s first attempt to work out the good, bad, and ugly in a trading phenomenon that rocked Wall Street, it has been called a populist insurgency fueled by individual day traders, not funds or large institutions About five related film and television projects are in the works

Committee members were there to see what happened, how and why, and to ask questions such as: B. whether the financial markets are broken (consensus: no), whether new regulation is necessary (maybe) and which (still unclear) The material is complex and committee chair Maxine Waters (D-CA) said today’s hearing is likely the first of three The SEC will also investigate the trade frenzy if President Biden’s election as commission chair Gary Gensler is his Seat has

Legislators take turns praising and slamming (mostly) a steadfast, soft-spoken Tenev, who said he had emigrated with his family from an economically devastated Bulgaria at the age of 5 and had “benefited from everything America was given Robinhood has 15 million customers.It and similar apps are commission-free and allow people to invest small amounts, opening the market for stock pickers who are younger, more diverse, and less wealthy than traditional stock investors and users flooded circuits in the past month who bought GameStop and a handful of other severely shortened stocks

But on 28 January, in the midst of the hustle and bustle, Robinhood temporarily locked those stock purchases and angered customers who said the company threw them under the bus, and Tenev flatly denied allegations that they were cahoots with funds that cut the stock’s restrictions required “to meet regulatory requirements and fail to protect hedge funds,” he said Griffin of Citadel also denied coordinating Robinhood uses Citadel to process its clients’ businesses

Tenev said financial registers require they have the capital or collateral to cover deals that take two days to complete (a delay they would like to change and regulators could look into) He said the scale of the action was unpredictable “It was a 1 in 35 million event One that had never been seen before We had to play this in accordance with our regulatory and capital requirements under the book”

Robinhood raised $ 3.2 billion, allowed trading to resume, and said there is now a cash cushion and better controls to keep it from happening again. He first admitted the company was in major crisis Previously, he had stated that fundraising was preventative and that there was no liquidity crisis. A group of lawmakers – including a drastic AOC – raped the firm at best because it miscalculated and was unprepared

Others have had greater doubts about Robinhood’s mission and have really advanced the concept of “democratizing” investment

Rep Ritchie Torres (D-NY) feared that a free trading app like Robinhood could be as addicting as any video game. Rep Cindy Axne (D-IA) called buying stocks with little or no information or data the same thing as Gambling “Gambling on the stock market is not a real solution to inequality. People who have access are nice, but if they don’t have the money to invest, it is not real democratization”

WallStreetBets users encouraged each other to buy stocks to nail large hedge funds that were Short GameStop and AMC This means that the companies made a financial bet that stocks would fall and hit a hit if they went up instead

So what, said Rep Tom Emmer (R-MN) “This was due to people’s desire to make money I don’t see what’s wrong with it, even if there is a desire to tie it to a hedge fund, that they don’t like, “he said,” We need more people who have the opportunity to develop financial literacy to increase their wealth “

Hearing focused almost entirely on GameStop AMC’s earnings were relatively more cautious, but still hit over $ 20 high after hitting a 52-week low of under $ 2 on Thursday, GameStop and AMC closed at $ 4069 and 69 $ 5 51

Gill, the son of a truck driver and nurse from Brockton, MA, disproved the characterization of retail investors as knowledge After graduating from college in 2009, he got interested in the stock market and struggled to find a job studied, I learned “, the favorite from WallStreetBets told the legislators, some skeptical. He thought the stock was undervalued” The market underestimated the prospects of its old business and overestimated the risk of bankruptcy. I grew up at GameStop and continue to shop there “But “The idea that I used social media to promote GameStop stock to ignorant investors and influence the market is absurd”

Huffman Defended Section 230, which gives Reddit the right to curate its content and user anonymity, “The fact that Reddit does not require people to reveal their own identities enables Reddit to work on WallStreetBets [otherwise ] don’t work because people reveal profits and losses and their financial situation ”

Less than a month after the story exploded, Deadline announced that Netflix is ​​in talks to make a movie that Mark Boal is negotiating and Noah Centineo, who is slated to play a major role in The Streamer doubles on GameStop with a new documentary series from Emmy and Oscar winners Dan Cogan and Liz Garbus. MGM has also acquired the rights to Ben Mezrich’s proposed book The Antisocial Network Jamie Rogozinski, the founder of WallStreetBets, has reportedly sold his life story to RatPac Entertainment and XTR, the company behind You Cannot Kill David Arquette and Bloody Nose, Empty Pockets, partnered with directors Chris Temple and Zach Ingrasci on a documentary

He said it! by wallstreetbets

Vlad Tenev, Roaring Kitty

World News – US House GameStop Hearing covers Robinhood, Reddit and WallStreetBets

Source: https://deadline.com/2021/02/robinhood-congressional-hearing-vlad-tenev-reddit-wallstreet-bets-testimony-1234696421/