AOC calls for hearings on Robinhood shutting down trading on Reddit investors

This week, we discussed the topic which has been all over the political, financial and online worlds: the Reddit small investors who successfully gamed the system to screw over billionaire hedge-funds. The hedge funds had shorted the stocks of several failing companies like GameStop, only to see small investors organize on Reddit to mass-invest in those stocks, inflating the stock prices and causing hedge funds to lose billions in a matter of days. Many of the Reddit small investors were using the Robinhood platform to invest. But then as soon as the hedge fund billionaires began to weep on their yachts, suddenly all of those stock trading platforms were pulling the plug on trading:

Several retail stockbrokers, including Robinhood, said they would allow trades of GameStop and other volatile companies after restricting customers’ ability to purchase securities earlier in the day.

“Starting tomorrow, we plan to allow limited buys of these securities,” Robinhood, a popular trading app, said. “We’ll continue to monitor the situation and may make adjustments as needed.”

Robinhood, which has attracted millions of millennials to trade on its platform by eliminating trading fees and making stock trading easy, had said Thursday morning that it would limit buying of the kinds of securities that have sparked an enormous rally in shares of GameStop, the video game retailer at the heart of the frenzy, and AMC Entertainment Holdings, the movie theater chain, and a number of other companies. The decision quickly drew fire.

[From The NY Times]

The billionaires are big mad that the “little guy” is gaming the system in the same way the billionaires do regularly. That’s it, at it’s most basic level. And instead of taking the L and writing off some billion-dollar losses, those hedge funds exerted pressure on Robinhood and other trading platforms to change the rules mid-game.

As you can imagine, elected officials like AOC and Elizabeth Warren have been using their platforms to explain what’s happening and why additional regulation is needed, and why there should be hearings and investigations into what’s happened this week. Robinhood’s decision to halt trading on GameStop has turned everyone into a populist – on this somewhat narrow issue, AOC, Ted Cruz and Don Trump Jr find themselves agreeing. But when Ted Cruz agreed with AOC on Twitter, she told him to go f–k himself (atta girl).

— Ted Cruz (@tedcruz) January 28, 2021

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.

— Alexandria Ocasio-Cortez (@AOC) January 28, 2021

— Alexandria Ocasio-Cortez (@AOC) January 28, 2021

Photos courtesy of Avalon Red.

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