PanamaTimes

Thursday, Mar 28, 2024

GameStop saga: Robinhood denies robbing poor to help rich

GameStop saga: Robinhood denies robbing poor to help rich

Key figures at the heart of the saga line up to insist there was no foul play as politicians search for weaknesses in the market.

The chief executive of Robinhood has dismissed suggestions the zero-commission trading platform tried to stop its own users profiting at the expense of hedge funds during the GameStop saga.

Vladimir Tenev was among prominent figures involved in the share trading frenzy last month to give evidence to a House of Representatives' committee investigating any possible wrongdoing and potential conflicts in the market's structure.

There was an unprecedented surge in the struggling retailer's market value when users of a forum on Reddit, who largely held accounts on Robinhood, collaborated to inflict billions of dollars of losses on hedge funds and other so-called short-sellers - those betting that the share price will fall.

The chart reflects closing daily prices during the year to date


It culminated in shares nearing $500 each at an intraday peak - from a lowly $20 - as stock options were greedily snapped up.

They were changing hands for $43 on Thursday as politicians attempted to get to the bottom of whether punters had been short changed when the price eventually crashed at the beginning of February.

A particular concern expressed before the hearing was that Robinhood, which has more than 13 million users, and some competitors had restricted and even suspended trading on the stock and shares in other companies at the height of the trend.

It drew fury at the time from prominent lawmakers, including Republican senator Ted Cruz, who accused the platforms of protecting the hedge funds at the expense of the little guy.

But Mr Tenev told the House financial services committee, in written evidence before Thursday's hearing, that the decision to halt buying was solely due to the need to meet regulatory capital requirements.

"Any allegation that Robinhood acted to help hedge funds or other special interests to the detriment of our customers is absolutely false and market-distorting rhetoric", he said.

He said of the trading restrictions: "Despite the unprecedented market conditions in January, at the end of the day, what happened is unacceptable to us.

"To our customers, I apologise, and please know we are doing everything we can to make sure this can't happen again."

His counterpart at hedge fund Citadel, and majority-owner of the company that handles the bulk of Robinhood's customer orders, denied any influence over Robinhood's decision.

Kenneth Griffin said the first he had learned of trading restrictions at Robinhood was via the news media.

One member of the committee accused him of "wasting my time" and failing to answer as he questioned the executive on whether Citadel gives better prices to certain brokerages.

Another to defend his role was a YouTuber known as Roaring Kitty, whose real name is Keith Gill.

Keith Gill, aka Roaring Kitty, is being sued by subscribers over claims he misled GameStop investors


He dismissed suggestions that he had helped coordinate the GameStop rally in some way through recommendations on his video channel.

Mr Gill, who is reported to have collected healthy profits from his holdings, insisted his pre-frenzy investment was solely based on publicly-known fundamentals of the business.

It was revealed on Wednesday that he was facing a class action lawsuit brought by investors who claim he duped them into buying options.

Mr Gill has dismissed the allegations as baseless.

He told the committee during his evidence: "I am not an institutional investor, nor am I a hedge fund.

"I do not have clients and I do not provide personalised investment advice for fees or commissions.

"I am just an individual whose investment in GameStop and posts on social media were based upon my own research and analysis."

Newsletter

Related Articles

PanamaTimes
0:00
0:00
Close
Apple warns against drying iPhones with rice
In a recent High Court hearing, the U.S. argued that Julian Assange endangered lives by releasing classified information.
Global Law Enforcement Dismantles Lockbit Ransomware Operation
Russian opposition leader Alexey Navalny has died at the Arctic prison colony
The President of Argentina Javier Mile does not fly private, he flies commercial, with the citizens he represents. And they LOVE him for it.
Bitcoin Reaches $50,000 for First Time in Over Two Years
Belo Horizonte: Brazil's Rising Carnival Hotspot for 2024
In El Salvador, the 'Trump of Latin America' stuns the world with a speech slamming woke policing after winning a landslide election
Tucker’s interview with Putin is over 50M views on X within the first 5 hours.
Finnish Airline, Finnair, is voluntarily weighing passengers to better estimate flight cargo weight
President Nayib Bukele has proudly announced El Salvador's remarkable achievement of becoming the safest nation in the Western Hemisphere.
Former Chilean President Sebastian Piñera Dies in Helicopter Crash
This farmer seems to understand science a bit more than the event organizer, Klaus Schwab.
Facebook turns 20: From Mark Zuckerberg's dormitory to a $1trn company
The Coolest Dictator in the World" on the Path to Victory in El Salvador
Macron, France and fake news
Indian-Origin Man 'King' Arrested For Smuggling $16 Million Drugs Into US
Can someone teach Americans that not every person with slanted eyes is Chinese?
Europe's Farmers Feeding the People, Protesting Against Politicians Who Do Nothing for Their Country and Serve Only Themselves at Taxpayers' Expense
Paris Restaurant That Inspired 'Ratatouille' Loses $1.6 Million Worth Of Wine
Brazilian Police Investigate Bolsonaro's Son for Alleged Illegal Spying
Police in Brazil Raid Residence of Bolsonaro Associate Over Allegations of Illegal Spying
Border Dispute Escalates as Texas Governor Vows Increased Razor Wire
OpenAI Enhances ChatGPT-4 Model, Potentially Addressing AI "Laziness" Issue
The NSA finally acknowledges spying on Americans by acquiring sensitive data
Report Reveals Toxic Telegram Group Generating X-Rated AI-Generated Fake Images of Taylor Swift
US Border Patrol States 'No Plans' to Remove Razor Wire Installed in Texas
Bitcoin Experiences Approximately 20% Decline in Value
Klaus Schwab recently appointed himself as the Earth's "trustee of the future."
DeSantis Drops Out, Endorses Trump.
Nikki Haley said former President Trump is "just not at the same level" of mental fitness as he was while president in 2016.
Residents of a southern Mexican town set the government palace on fire in response to the police killing of a young man
Samsung Launches AI-Driven Galaxy S24, Ushering in New Smartphone Era
Judge Questions SEC's Regulatory Overreach in Coinbase Lawsuit
The Ecuador prosecutor who was investigating the television studio attack, has been assassinated.
Is artificial intelligence the solution to cyber security threats?
Vivek Ramaswamy suspends his US election campaign and endorses Trump.
Viral Satire: A Staged Satirical Clip Mistaken as Real Footage from the 2024 World Economic Forum in Davos
The AI Revolution in the Workforce: CEOs at Davos Predict Major Job Cuts in 2024
Ecuador Reports 178 Hostages in Prison Gang Standoff
The Startling Cuban Espionage Case That Has Rattled the US Government
Two Armed Men in Ecuador, Dressed as Batman and The Joker Storm the Streets.
Armed Gang Raids Ecuadorian TV Station Following State of Emergency Declaration
Anti-Democratic Canada: Journalist Arrested for Questioning Canadian Finance Minister on Support of Terrorist Group
Ecuador's 'Most-Wanted' Criminal Vanishes from Prison
Mexican Cartel Supplied Wi-Fi to Locals Under Threat of Fatal Consequences for Non-Compliance
Border Surge Leads to Over 11,000 Migrants Waiting in Northern Mexico
Outsider Candidates Triumph in Latin American Elections
As Argentina Goes to the Polls, Will the Proposal to Replace the Peso with the Dollar Secure Votes?
Fatal Shark Attack Claims Life of Boston Woman Paddleboarding Near Bahamas Resort, According to Police
×