- AOC called Robinhood barring users from buying GameStop stocks ‘unacceptable.’
- Major trading platforms have banned purchases of GameStop and AMC stocks.
- AOC said the House Financial Service Committee should investigate the matter if necessary.
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Rep. Alexandria Ocasio-Cortez of New York called the stock trading platform Robinhood blocking purchases of GameStop stock “unacceptable” and called for the House Financial Services Committee to investigate if necessary.
Trading platforms including the popular app Robinhood, Ameritrade, and Fidelity have halted users from purchasing shares of certain companies that Reddit users have been buying up en masse.
Over the course of the month of January, investors and members of the popular Reddit forum r/WallStreetBets – which has more than 2 million users – have pushed shares higher for retailers GameStop, AMC, Nokia, and Blackberry. All of the stocks were being heavily shorted, or bet against, by major hedge funds prior to the activity.
Read more: One chart shows how 3 GameStop shareholders gained nearly $4 billion in a week
The Redditors are making the trades have brought in big money for themselves and caused headaches for the hedge funds who shorted GameStop shares, but have been accused by critics of manipulating the market and creating a bubble that is bound to burst.
—Alexandria Ocasio-Cortez (@AOC) January 28, 2021
"Inquiries into freezes should not be limited solely to Robinhood," Ocasio-Cortez added. "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."
The move by major trading platforms to block purchases has drawn sharp criticism from figures from around the financial world and across the political spectrum. Other critics include Barstool Sports founder and CEO Dave Portnoy, Donald Trump Jr., and Republican Sen. Ted Cruz, who tweeted that he "fully agree[d]" with Ocasio-Cortez's criticism of Robinhood.
Ocasio-Cortez, however, shot back at Cruz in a follow-up tweet that referenced the January 6 Capitol insurrection.
"I am happy to work with Republicans on this issue where there's common ground, but you almost had me murdered 3 weeks ago so you can sit this one out. Happy to work w/ almost any other GOP that aren't trying to get me killed.In the meantime if you want to help, you can resign," she wrote.
Two of Ocasio-Cortez's progressive Democratic colleagues, Rep. Rashida Tlaib of Michigan and Rep. Ro Khanna of California, who represents Silicon Valley, also got behind her call for the House to hold hearings over the matter. Khanna tweeted: "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."
Read more: GameStop plunges as much as 60% after Robinhood curbs trading on wildly volatile morning
On Wednesday, both Ocasio-Cortez and Sen. Elizabeth Warren - a leading expert on consumer protection law who has long advocated for stricter restrictions on the financial industry and Wall Street - called out what they saw as the hypocrisy of major Wall Street critics of the Reddit traders.
"Gotta admit it's really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino," Ocasio-Cortez tweeted on Wednesday.
Warren similarly stated argued that "for years, the same hedge funds, private equity firms, and wealthy investors dismayed by the GameStop trades have treated the stock market like their own personal casino while everyone else pays the price," calling on regulators to "wake up and do their jobs."
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