Home Monetary Companies Committee Listening to on GameStop/Robinhood/Reddit Saga Continues this Week with New Spherical of Witnesses

As beforehand reported, the Home Committee on Monetary Companies will host half two of the listening to tackling the GameStop/Robinhood/Reddit buying and selling phenomenon tomorrow. “Recreation Stopped? Who Wins and Loses When Quick Sellers, Social Media, and Retail Buyers Collide, Half II” will likely be live-streamed on the Committee’s web site on Wednesday, March 17, 2021, at 10:00 am ET.

Earlier this 12 months, a bunch of particular person buyers communicated on Reddit, together with the subreddit Wallstreetbets, shorted Gamestop inflicting a dramatic quick squeeze driving shares larger. The fast transfer induced Robinhood to lift extra capital as many trades have been happening on its digital buying and selling platform. The complete drama captured headlines world wide. In the meantime, hedge funds that had held quick positions in GameStop received crushed.

Final month the first of three hearings passed off involving representatives from the principal individuals within the commerce.

The Committee has shared the slate of witnesses that will likely be testifying on behalf of this listening to. These embrace:

• Michael Blaugrund, Chief Working Officer, New York Inventory Alternate
• Vicki Bogan, Affiliate Professor, Cornell College
• Alexis Goldstein, Senior Coverage Analyst, People for Monetary Reform
• Dennis Kelleher, co-founder, President and Chief Government Officer of Higher Markets

In line with the Committee’s memorandum on the listening to, matters of debate might embrace the next:

• Fee for Order Movement and Greatest Execution – a authorized follow that Robinhood makes use of to generate income by routing commerce to sure brokers
• Kind 13-F Reporting – the submitting that reveals quick positions as within the state of affairs with GameStop.
• Quick sale disclosure
• Accelerated settlement – at present a purchaser should settle a commerce in two days after the transaction (T+2). Some consider this could transfer to T+1.
• “Market Dominance by Sure Individuals” – that is an allusion to Citadel’s function as a market maker and its involvement within the buying and selling of GameStop
• Gamification and Social Media

Whereas some commentators have famous that markets held up somewhat effectively through the heightened volatility of buying and selling in GameStop, the Committee is within the technique of reviewing all facets of the occasion to find out whether or not any laws is required or, maybe not.