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Two of Wall Street’s top hedge fund managers are expected to testify with the managing directors of Reddit and Robinhood at next week’s U.S. Congress hearing on the market turmoil surrounding trading in GameStop stocks.
The House of Representatives financial services committee announced the list of high-level witnesses on Friday evening. It features Ken Griffin of Citadel and Gabe Plotkin of Melvin Capital, as well as Steve Huffman of Reddit and Vlad Tenev of Robinhood.
The committee added that Keith Gill, the trader known as “Roaring Kitty” who has emerged as one of the key players in the GameStop rally which is drawing political scrutiny, will also appear.
The hearing, which will take place in Washington on Thursday, will be chaired by Maxine Waters, a veteran California Democrat and longtime critic of the financial services industry. The title of the audience will be “Game Stopped? Who wins and loses when short sellers, social media and retail investors collide.
Testimonials in Congress from senior financial services executives are fairly common, but it’s rarer for the best hedge funds and private equity executives to be burnt out on Capitol Hill.
The political attention of stock trading has increased sharply in recent weeks. It came after a rally in GameStop stocks that was led by active retail investors on the social media platform Reddit. They defied hedge funds that bet on the video game retailer’s stock decline.
When Robinhood, the online trading platform, halted trading on GameStop due to volatility, it fueled a backlash among retail investors joined by populist politicians on the right and left who said that it offered evidence that the financial system was biased in favor. of its biggest players.
GameStop shares, which peaked at $ 347.51 on January 27, have since fallen and closed at $ 52.40 on Friday. Even though trading in GameStop stocks stabilized, lawmakers and regulators in Washington decided to investigate whether the episode was due to market manipulation or other systemic issues in the financial system.
Last week, Janet Yellen, the US Treasury Secretary, called a meeting of leading regulators, including the Securities and Exchange Commission and the Commodity Futures Trading Commission, saying that “the basic infrastructure of the market is resilient” but that the SEC would publish a “timely study” of the events.
In addition, the SEC and CFTC will “examine whether business practices are consistent with protecting investors and ensuring a fair and efficient market.”
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