Rep. Alexandria Ocasio-Cortez (D-NY) called on Congress to investigate the Robinhood app after it banned small investors from buying stock in companies like GameStop. Over the last week, Reddit users have rushed to buy the bemoaned video game retailer’s stock, inflating its price in what some are calling the “squeeze of a lifetime.”
In a Thursday tweet, Ocasio-Cortez called Robinhood’s decision to block retail investors from purchasing stock in companies like GameStop and Blackberry “unacceptable,” and that’d she’d “support a hearing if necessary.” Ocasio-Cortez is a member of the House Financial Services Committee, which has jurisdiction to oversee the stock market and “securities and exchanges” more broadly.
Sen. Ted Cruz (R-TX) retweeted her message, saying “Fully agree.”
House Financial Services Chairwoman Maxine Waters (D-CA) put out a statement later on Thursday calling for a hearing. “Hedge funds have a long history of predatory conduct and that conduct is entirely indefensible,” Waters said. “As a first step in reining in these abusive practices, I will convene a hearing to examine the recent activity around GameStop (GME) stock and other impacted stocks with a focus on short selling, online trading platforms, gamification and their systemic impact on our capital markets and retail investors.”
Chairwoman Incoming Senate Banking Committee Chair Sen. Sherrod Brown (D-OH) said in a statement Thursday that the committee will hold a hearing on the “state of the stock market” in the future.
Other progressive Democrats have also made statements on the GameStop shorts, calling for further regulation of the financial industry. “It’s long past time for the SEC and other financial regulators to wake up and do their jobs — and with a new administration and Democrats running Congress, I intend to make sure they do,” Sen. Elizabeth Warren (D-MA) said in a statement Wednesday.
Silicon Valley progressive Rep. Ro Khanna (D-CA) put out a statement Thursday saying, “We’re done letting hedge fund billionaires treat the stock market like their personal playground, then taking their ball home as soon as they lose,” he continued. “We need more regulation and equality in the markets.”
Later on Thursday, Khanna retweeted Ocasio-Cortez, writing, “We need an investigation into RobinhoodApp’s decision and who influenced that. And this shows the need for a financial transaction tax on hedge fund shorting and SEC regulations on short selling practices.”
It’s unclear if Congress will move forward with an investigation into Robinhood . At a press conference Thursday, House Speaker Nancy Pelosi (D-CA) said “interesting, isn’t it?” when asked about the GameStop shorts, but did not forecast any actions Congress planned to take regarding the situation.
Correction 1/28/21 at 1:35PM ET: This article previously said that Reddit users “shorted” GameStop stock. This was incorrect; instead, users rushed to buy the stock, inflating its price. The Verge regrets the error.
Updated 1/28/21 at 3:14PM ET: Updated to include that Senate Banking will hold a hearing on the “state of the stock market” in the future.
Updated 1/28/21 at 4:36PM ET: Included a statement from House Financial Services Committee Chairwoman Maxine Waters calling for a hearing.