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A number of Democrats and Republicans have united in opposing the strict limits imposed by Robinhood and other online stock brokers on buying GameStop and other stocks, in a trading frenzy fueled by Reddit this week. .
Members of Congress such as Alexandria Ocasio-Cortez, DN.Y., Ro Khanna, D-Calif., Ted Lieu, D-Calif., Ken Buck, R-Colo., And Sens. Pat Toomey, R-Pa. and Ted Cruz, R-Texas, were among those who criticized the move, with many calling for hearings that Democratic leaders say will soon be held in the House and Senate, as what started as an internet movement continues. to shake up Wall Street.
Lawmakers have drawn attention to the volatility surrounding GameStop’s stock, like many others this week. The title has gone from $ 4 just a few months ago to over $ 400 this week, fueled by an online movement reminiscent of others that have dramatically altered the political landscape in recent years. At the same time, the hedge funds that made big bets on the craterization of GameStop shares – known as “shorting” – began to rack up big losses. Then the brokerages instituted limits, leading to accusations of collusion with large financial entities facing big losses.
Robinhood co-founder Vladimir Tenev said hours after change that she had no choice but to limit stocks as she and her peers were constrained by obligations imposed by federal regulators. The decision “was not made on the direction of any market maker we are addressing or other market players,” he said, adding that notions to the contrary amounted to “misinformation. “.
For both progressive and conservative members, there was a sense that the nation was watching a populist insurgency win, even temporarily, against a so-called rigged system. Still, there isn’t a broad consensus on what policy goals to pursue in response to brokers limiting users’ ability to trade a handful of stocks.
“There is clearly a bipartisan concern,” Michael Steel, former spokesperson for then-Speaker John Boehner, R-Ohio, told NBC News. “I think the question is whether there are effective public policy changes that make sense and would make a difference.”
For the left, the restrictions were seen as further evidence of Wall Street wrongdoing, prompting demands for tighter regulation. On the right, lawmakers have decried the limits as flouting the free market, while likening the reduction to other claims of big tech “censorship”.
This dynamic deal – at the surface level that gives way to existing partisan divisions – reflects partisan shortcomings in other areas where the parties have found common grievances, most notably with big U.S. tech companies.
House Financial Services Committee Chair Maxine Waters, D-Calif., And new Senate Banking Committee Chairs Sherrod Brown, D-Ohio, said their committees will soon hold hearings to deal with the ‘test. Democrats and Progressives also said the episode confirmed the selection of President Joe Biden for Securities and Exchange Commission chairman Gary Gensler all the more urgent.
“The bipartisan support for an investigation is good, but at the end of the day if you think someone like Ted Cruz will actually resist on Wall Street, I have a GameStop short position that I would like to sell you,” Tim said. Hogan, Democratic consultant and former spokesperson for Senator Amy Klobuchar’s presidential campaign.
Senator Elizabeth Warren, D-Mass., One of the leading Democrats on financial regulatory matters, wrote to the acting SEC commissioner on Friday to ask how well a combination of large investors and online message boards had an impact on the fluctuation of GameStop’s stock, if any of these practices violated existing laws, and if the “wild swings” of GameStop and the value of other companies “presented systemic problems for them. financial systems or the stock market? “
“There are rich people on both sides, people who are apparently trying to manipulate this market,” Warren told CNBC Thursday. “And that’s what we don’t know the details of.”
Like many of the forces that have shaped US politics in recent years, the Reddit forum, r / WallStreetBets – which describes itself as “Like 4chan found a Bloomberg terminal” and is credited with being the originator of much commercial frenzy – sells the idea of the little guy taking the big establishment. Amid a pandemic that has sparked a surge in retail, its audience has grown dramatically in recent months.
“You know something’s about to happen as most members of Congress are united on Wall Street in trying to f — us,” one user wrote on Thursday, linking to a tweet from Location. Another wrote that he wasn’t particularly pushed into the GameStop business until it “turned into a class move.”
“I am a big populist and I think we need big changes in this country, especially a transfer of wealth and power from the elites to the people,” the user wrote. “When it turned into a class movement, I became obsessed.
The mad rise of GameStop traders has been hailed by some of the richest people in the world, like Tesla CEO Elon Musk and the Winklevoss twins. Former President Donald Trump’s eldest son Donald Trump Jr. has also sought to portray himself as an ally of Redditors.
Andy Surabian, a Republican strategist, said people “are probably underestimating the magnitude of this moment,” adding that the episode “likely did more to hurt Big Tech in the eyes of people who weren’t shooting them already, than anything I’ve seen in recent history. “
Seeming to sense a shift in the political winds, Robinhood listed a job Friday for a “director of federal affairs” to “focus on federal advocacy and government affairs” dealing with laws and regulations.
“The job posting doesn’t mention it, but you’ll also get to know the House Financial Services Committee,” Rep. Jamaal Bowman, DN.Y., said. tweeted, with a crying laughing emoji.
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