AOC, Ted Cruz, and fellow lawmakers are demanding answers after swings in GameStop stock. Here’s what they said

• Congressional lawmakers from both parties asked the SEC to look into market volatility.
• Lawmakers said there was a “double standard” for retail and Wall Street investors.
• “The same rules should apply to everybody – rich & poor alike,” said Senator Ted Cruz. 
• Visit Business Insider’s homepage for more stories.

As investors watched GameStop stock rise and fall this week, lawmakers asked the Securities and Exchange Commission to look into market volatility and trading platforms. 

Some asked for the SEC to review actions taken by Robinhood, a retail investment platform, which paused some trading of GameStop and other stocks on Thursday. 

“We continuously monitor the markets and make changes where necessary,” the company said in a statement on Thursday. “In light of recent volatility, we restricted transactions for certain securities to position closing only.”

The app restarted most trading on Friday, after raising $1 billion from existing investors overnight.

In a statement on Friday, the SEC said it was “closely monitoring and evaluating” the week’s trading. 

Here's what a few lawmakers said about this week's market activity. 

In a letter to the Securities and Exchange Commission, Senator Elizabeth Warren said: "I am deeply concerned that these casino-like swings in the value of GameStop and other company shares are yet another example of the gamesmanship that interferes with the 'fair, orderly, and efficient' function of the market, raising obvious questions about public confidence in the market and those trading in it."

She said she wants to know "how the SEC intends to address these concerns and prevent these and future incidents of potential market manipulation."

Senator Sherrod Brown, the incoming chairman of the Banking, Housing, and Urban Affairs, announced a hearing. 

—Senate Banking and Housing Democrats (@SenateBanking) January 28, 2021

 

"People on Wall Street only care about the rules when they're the ones getting hurt," he said in a statement. "American workers have known for years the Wall Street system is broken - they've been paying the price. It's time for SEC and Congress to make the economy work for everyone, not just Wall street."

Speaking on Fox News, Senator Tom Cotton said: "I do believe we will need to have hearings, in particular have hearings on Robinhood and some other outlets shutting down trading for small solo investors yesterday into these stocks, while major institutional investors continue to trade."

He added: "These solo investors have really done nothing to some of these major institutional investors that they don't do to each other all the time by so-called short squeeze, buying stocks that the institutional investors are short on. No surprise, no real news there, but the trades have to be conducted on an equal and fair basis."

Representative Alexandria Ocasio-Cortez said on Twitter: "Inquiries into freezes should not be limited solely to Robinhood. This is a serious matter. Committee investigators should examine any retail services freezing stock purchases in the course of potential investigations - especially those allowing sales, but freezing purchases."

Ocasio-Cortez said on Twitter, "This is unacceptable." Senator Ted Cruz responded, saying, "Fully agree."

Cruz later said: "The same rules should apply to everybody - rich & poor alike."

In a statement, Representative Jeff Duncan said: "We are witnessing a modern day David vs. Goliath story. All the American people want is fairness - from the little guy all the way up to large corporations. They want to know the system isn't rigged against them, and that rich Wall Street types play by the same set of rules as the rest of us. But the actions by certain financial institutions, like Robinhood, prove otherwise."

He added: "The wealthy and well-connected get cover at the expense of every day Americans making individual decisions in the market. This is Wall Street collusion at its worst, and we need answers from the SEC immediately."

Duncan also led a group of lawmakers who wrote a letter to the SEC. 

—Rep Rick Crawford (@RepRickCrawford) January 29, 2021

 

In an interview with Insider, Representative Ro Khanna said: "Everyone on Robinhood should have equal access for trading. They can't just shut down trading for retail investors and not hedge funds."

 

Senator Josh Hawley said in a statement: "What we've seen I think with this GameStop meltdown that Wall Street is having now, these folks at home, these day traders, retail investors, they've got more criticism, more scrutiny than the people who crashed the entire financial market in 2008 and they got bailed out, the government bailed out all of those people. I mean it shows you that the fix is in."

 

On Twitter, Representative Madeleine Dean said: "Why do platforms like 'Robinhood' hold working people accountable for 'market manipulation' when Wall Street and hedge funds have gotten away with the same tactics to enrich themselves for decades?"

She added, "Let's figure out the double standard."