Thursday, May 6, 2021

Alexandria Ocasio-Cortez calls for surveillance in GameStop saga | Financial market news

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The Democratic MP tweeted that lawmakers need to know more about Robinhood’s decision to “ block retail investors from buying stocks while hedge funds can freely trade stocks as they see fit. ”

Representative Alexandria Ocasio-Cortez attacked trade restrictions placed on GameStop Corp. by Robinhood Markets Inc. and other platforms, saying the restrictions on high-profile stocks required further scrutiny from U.S. regulators and Congress.

The New York Democrat, a leading voice in the progressive movement and a member of the House Financial Services Committee, said in a series of tweets that she would support hearings on restrictions affecting stocks such than video game retailer GameStop, which fell as high as 68% Thursday after the curbs were imposed.

“This is unacceptable,” Ocasio-Cortez wrote in a tweet Thursday. “Now we need to know more about @ RobinhoodApp’s decision to prevent retail investors from buying stocks while hedge funds can freely trade stocks as they see fit.”

Ocasio-Cortez added that the close scrutiny of the transaction freeze should apply to all retail vendors who have frozen their share purchases, not just Robinhood. His comments were supported by Senate Republican Ted Cruz, who retweeted his post a few minutes later adding “Strongly Agree.”

Lawmakers and the Biden administration are under pressure to respond quickly to the turmoil on Wall Street unleashed by retail investors whose speculative betting has pushed up the stock prices of companies like GameStop and AMC Entertainment Holdings Inc.

The gains of these companies caused large losses in some hedge funds that had bet against the stocks, and fluctuations in stock prices prompted Robinhood, Interactive Brokers and other platforms to reduce the activity of several high-profile stocks. .

Congressman Ro Khanna, who represents Silicon Valley, said recent activity shows the need for “more regulation and equality” in the markets.

“We are done letting hedge fund billionaires treat the stock market as their personal playground, then bring their ball home when they lose,” the Democrat said in a statement. “While retail in some cases, like Robinhood, blocked the purchase of GameStop, hedge funds were still allowed to trade in stocks. We need more regulation and more equality in the markets. “

It is not clear whether other lawmakers will join the progressives in calling for additional oversight.

Ocasio-Cortez rejected Cruz’s overture on Twitter, saying he should resign after his challenges in the November presidential election were echoed by rioters who stormed the Capitol on January 6. Some of the rioters were recorded saying that Cruz would like them to invade Congress. Ocasio-Cortez, who is often vilified by right-wing commentators, said she faced specific threats that day that made her fear for her life.

The GameStop turmoil even caught the attention of House leaders. President Nancy Pelosi told reporters on Thursday that the Biden administration was reviewing the situation and suggested Congress launch its own investigation.

“We’re all going to look at it,” she said at a press conference Thursday. “It’s interesting.”

GameStop’s volatile trading briefly pushed the stock to No.1 on the Russell 2000 Index – despite the trading restrictions. But shares then fell 68% from their peak and trading was halted for the second time on Thursday.

Jared Bernstein, a member of President Joe Biden’s Council of Economic Advisers, reiterated that the US Securities and Exchange Commission is looking into the trading frenzy. But he suggested the situation was only a symptom of a wider inequality in the US economy.

“For me, and for the president, where it’s going is that we’re not going to measure our progress by the stock market,” Bernstein told CNN. “You have a booming stock market and you have increasing poverty. This is at the heart of the problem that we are trying to solve, not only in the short term but in a sustainable way. “



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