gamestop congress hearing

So the brokerages had to hit pause. Retail traders driven by the WallStreetBets subreddit and the exuberance that ensued may end up losing big, notwithstanding the squeeze they put on some institutional players.”, NEW PYMNTS DATA: CRYPTOCURRENCY PAYMENTS STUDY – MAY 2021. And there were also plenty of life-changing profits taken by people far beyond the usual suspects. After an internal investigation, Mr. Huffman said he saw no evidence of malign actors artificially generating excitement about GameStop or other companies that were buoyed by WallStreetBets. Congress to hold hearing on GameStop saga The House Committee on Financial Services will dig into the recent GameStop saga Thursday. Now trading around $40 per share, at one point, its price was as high as $483. He appeared at a Congressional hearing in February regarding Reddit's influence on the market. GameStop's stock crashed shortly after traders in a Reddit community pushed it to all-time highs. Gary Gensler speaks during a hearing of the Senate … By Sissi Cao • 05/06/21 1:06pm. In the end, the day’s testimony aimed at protecting traders — particularly young ones — from being manipulated by actors looking out for their own bottom lines. While all witnesses offered different perspectives in their written statements on what went wrong in January, the bulk of their comments boiled down to a few major issues. Later this week, the House Committee on Financial Services will hold a hearing addressing the GameStop trading phenomenon. So, of course, GameStop stock … Robinhood and Reddit in the spotlight during GameStop congressional hearing By Matt Egan, Brian Fung and Clare Duffy, CNN Business Updated 5:51 p.m. REPORTS, Partner “Is it any wonder why the unhealthy dynamics of GameStop happened?”. The CEOs of Robinhood, Citadel and Melvin Capital also spoke at the hearing. “Think about this: A Robinhood trader wants the spread in the stocks he/she is trading to be as narrow as possible. Nedbank, Unattended Retail And Business Payments Automation Top This Week’s News, Today In Retail: Crocs Digital Sales Surge; FedEx Teams With Adobe, GameStop Now Has An Additional $551 Million To Fund Its eCommerce Transformation, GameStop Confirms CEO To Depart By July 31, GameStop, B2B Payments, Subscriptions Top This Week’s News, Treasury Disbursed $242 Billion In Relief Funds To 90 Million Americans, Consumers Rebalance Credit-Debit Preference As Economy Reopens, Connected Tech Overcomes Hearing Aids Stigma, Enterprise Security Requires Back-To-Basics Approach, PYMNTS Dan Primack, author of Pro Rata. Though shares in GameStop and fellow meme stock AMC have fallen far short of “the moon” where its boosters hoped it would land, both companies are, for now, trading above their most disastrous lows. Hedge funds, the practice of short selling, … “I think that era has ended where there’s this automatic kneejerk reverence for a $5 billion hedge fund manager with a PowerPoint” pitching other investors on why they should bet against a company. The House Committee on Financial Services has announced the hearing schedule for the month of May. In the Cryptocurrency Payments Report, PYMNTS surveys 8,008 cryptocurrency users and nonusers in the U.S. to examine the ways in which they plan to use crypto to make purchases, what crypto they plan to use — and how merchant acceptance can influence merchant choice and consumer spend. The Times is committed to publishing a diversity of letters to the editor. From a public policy perspective, if sub-penny trading is allowed in private dark trading, we believe similar conventions should also be allowed on public lit exchanges.”. Those issues include investor education, greater market transparency and equality, and taking a closer look at the “payment for order flow” system by which brokerage firms gain benefits and compensation for directing trades to particular entities — such as high-frequency trading (HFT) market making firms — for execution. At the hearing’s center was Vlad Tenev, the chief of the Robinhood. GameStop hearing paints Silicon Valley as public enemy #1. Many of us in the media, along with media consumers, tried to make sense of the frenzy — our brains (and business incentives) demand it. In his statement, Themis Trading Partner Sal Arnuk went right for that last issue, calling attention to the fact that payment for order flow (PFOF) causes a disconnect between a broker and his customer — especially in the case of Robinhood. This is an amazing misalignment of interests.”, He added that Robinhood’s founders attained a $12 billion to $20 billion valuation primarily based on PFOF, which means it is in the company’s interest to encourage more customer trading, even if it’s not in their best interest. Then there was Keith Gill, known as Roaring Kitty on YouTube and Deep [Expletive] Value on Reddit. But it does raise the question of why regulators are eyeing new rules about their behavior. The House Financial Services Committee held a hearing on Robinhood and GameStop stock volatility on Wednesday. All in all, some hedge funds got pummeled, but briefly. The hearing was understandably full of the typical Washington, D.C. grandstanding, but the ultimate fallout from the GameStop fiasco could have a major impact on financial markets if … At the hearing, various members endorsed different theories. Congress … The HFT market maker buying those orders benefit most when that spread is as wide as possible. While users of the Reddit forum WallStreetBets had been talking up GameStop for weeks before its stock skyrocketed, it grew into a cultural phenomenon only once a jaunty bunch of forum members painted themselves as the antagonists of the hedge funds that bet big money on GameStop plummeting (by “short-selling” the stock). “Many Americans feel that the system is stacked against them, and no matter what, Wall Street always wins,” said the Financial Services Committee chairwoman, Maxine Waters, Democrat of California. “I believe it is more likely that, when we have full information about this episode, the story will more closely resemble Goliath vs. Goliath. Maxine Waters, the chairwoman of the House Financial Services Committee, told the gathering Wednesday morning (March 17) that this second go-round would be absent some of the celebs made by the Game Stop trading controversy like Vlad Tenev, and warned that “as the events in January cast a spotlight on gaps in regulation of our capital markets, the Committee must assess what legislative steps may be necessary.”. She said brokers like Robinhood use “powerful behavioral-science-based techniques to influence investor behavior in a particular direction,” by using “prompts, push notifications, and other nudges for the purpose of eliciting specific behaviors — increased trading by the investor.”. And now Robinhood benefits most when the spread is as wide as possible as well! The pet industry has experienced a year like no other, with consumers spending more time at home and looking to add furry... Healthcare payments in the United States may not be all that healthy — a diagnosis easily made with a quick glance at... You have successfully joined our subscriber list. The hotly-anticipated hearing roped in the heads of Robinhood and Reddit, along with Melvin Capital, which suffered huge losses in the GameStop short squeeze. SEC Chief Warns Day Trading Results in Poor Returns During Congressional Hearing. The 12 pm ET hearing will also feature testimony from Reddit CEO Steve Huffman and Keith Gill, a trader whose posts on the WallStreetBets subreddit helped fuel the GameStop … “If it becomes a meme,” Mr. Brown said, “literally your fund could get closed.”. ET, February 18, 2021 Representative Maxine Waters (D-Calif. 43rd District) and the House Committee on Financial Services are hosting this motley crew at the much-anticipated GameStop congressional hearing, which begins Thursday at noon (read our live blog here) and is set to address a number of questions related to the retail trading frenzy and its aftermath. The kickoff begins this Thursday with the Committee’s third hearing on the wild trading action in shares of GameStop and other meme stocks. About The Study: U.S. consumers see cryptocurrency as more than just a store of value: 46 million plan say they plan to use it to make payments for everything from financial services to groceries. Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram. Here are some tips. The financial heavyweights involved in the episode were called to the hearings as well: There was Gabe Plotkin of Melvin Capital, the hedge fund that took the most infamous losses by betting against GameStop. “Many have framed the GameStop mania as a David vs. Goliath struggle,” said Alexis Goldstein, senior policy analyst for Americans for Financial Reform. It was this knotty set of entanglements that spurred bipartisan outrage and seeded conspiracy theories online — especially when Robinhood restricted purchases of GameStop and other meme stocks, with little explanation, fueling a crash in their share prices. The CEOs of Robinhood, Citadel and Melvin Capital also spoke at the hearing. All parties have thus far denied this to be the case. The chief executive of the Robinhood app has defended the decision to halt trading in GameStop shares at a congressional hearing on Thursday, … His app’s user-friendly interface and his initial belief in imposing few guardrails on its traders enabled an unprecedented surge in the share price of the video game retailer GameStop. Illustration: Annelise Capossela/Axios. Some technocrats had wondered if Reddit may have enabled a form of illegal stock manipulation. At the hearing’s center was Vlad Tenev, the chief of the Robinhood. But it did illustrate how Silicon Valley has overtaken Wall Street as public enemy number one, particularly among Democrats. Feb. 19, 2021, 03:50 PM. … After all, the market — with meme stocks or not — may take care of them on its own. The marketplace of opinions about the meme stock phenomenon has been as volatile as the trading itself: A series of hypotheses about populism, corruption, masculinity, inequality and price bubbles battled for primacy among those of us who watch cable news and consume think pieces. In that void, many became suspicious that Citadel may have been illegally pulling strings to make money on both sides of the saga. Mr. Zeitlin is a journalist covering finance, economics and public policy. Blaugrund said that at the end of 2020, “more shares were executed in private, dark venues than on lit public exchanges with price discovery.” He added: “The NYSE believes that it is time to harmonize the on and off-exchange price increment regimes. “We created a world where it’s easier to buy a lottery ticket than it is to invest in the next Google,” he said. While financial commentators and regulators can and will argue about what if any regulations should be instituted going forward, it looks as if everybody played by the rules, as they stand. Perhaps the most anticipated testimony came from New York Stock Exchange Chief Operating Officer Michael Blaugrund. Welcome to GameStop on Capitol Hill, round two. “This tells you Robinhood knows full well the value of its herded and gamified product base; they knew to educate their users just enough to incentivize trading and maximize their own revenue as a result of it.”, Cornell Associate Professor of Finance Vicki Bogan echoed Arnuk’s sentiments and pointed out the dangers of gamifying investing. And while Melvin Capital, the beleaguered hedge fund, finds itself fortunate and still in operation, any institution with a greedy “short” position on a thinly traded stock runs a major risk in this newly democratized financial market. Keith Gill, the Redditor/YouTuber seen by many as the central figure in GameStop’s stock price soaring to almost $500 in late January, testified before the … Conditions. Matthew Zeitlin is a journalist covering finance, economics and public policy. We’d like to hear what you think about this or any of our articles. The U.S. House Financial Services and Senate Banking committees said on Thursday they will hold hearings on the stock market after users … And so Steve Huffman, Reddit’s chief executive, was in attendance Thursday too. The most meaningful thing to glean from all of this, according to Josh Brown, the chief executive of Ritholz Asset Management, may be a large incentive change for market behavior going forward: “I don’t think it’s in anyone’s best interest to be that visibly vocally ‘short’ on anything,” he told me. https://www.nytimes.com/2021/02/23/opinion/gamestop-price-congress-robinhood.html. But after the hearing, it became clear that the sinister theories lacked substance. He broke the reforms he sees needed into four categories: modernizing shareholder disclosures; providing transparency for securities lending; accelerating industry settlement cycles from two day to one day after the trade; and eliminating competitive barriers for public investors, in which he discussed the advantages broker-dealer “wholesalers” have over public traders both in terms of where they trade and how much they can make trades for. And here’s our email: letters@nytimes.com. The ‘Goliaths’ in this case are the largest Wall Street institutional players: hedge funds, especially those that employ high-frequency trading algorithms, and the ‘flow’ trading desks at major banks like Goldman Sachs and Morgan Stanley. That’s the bizarre takeaway I was left with this past Thursday, following the House Financial Services Committee’s five-hour hearing on last month’s wild emergence of day-traders betting enormous collective sums on “meme stocks” — shares in the companies that became half-ironically very popular on Reddit and the brokerage app Robinhood this year. Some unlucky retail investors got in on the fun too late, taking serious losses. During the hearing, lawmakers are set to hear testimony from major players, including the heads of … The virtual hearing, which will be live-streamed on the committee’s YouTube channel, is expected to examine possible collusion between Robinhood, Citadel Securities and Melvin Capital in the decision to stop trading of GameStop shares on Robinhood at the height of the rally. Few will mourn the degradation of aggressive short-sellers; they’re the skunks at the picnic. Barring some bombshell revelation, it appears the hearing confirmed a more turgid underlying truth: The trading in GameStop and other meme stocks was so volatile that the clearinghouses — which are in charge of making sure money gets correctly exchanged between buyers and sellers — demanded billions in collateral from Robinhood and other retail brokerage platforms to ensure that the trades settled. That’s a pretty muddied picture. The panel’s ranking Republican member, Patrick McHenry of North Carolina, suggested that the issue was less that of a game rigged against small-time investors and more the lack of productive assets for them to buy. “They recently changed their PFOF method from one giving them a set payment per share to one giving them a percentage of the spread instead,” he said. He was joined by Kenneth Griffin, the leader of Citadel. Market Experts React To GameStop Hearing: 'Congress Needed To Dig Deeper' Wayne Duggan, Benzinga. The House Financial Committee’s second hearing on the GameStop fiasco yielded different perspectives, but comments came down to several major issues. In the end, it appears a lot of money changed hands in unforeseen, bizarre ways, but that there are no grand lessons, despite our great desire for them. With Us, Terms & Congress yesterday lived down to its reputation, uncovering little new information about the GameStop stock surge. So did we really learn anything profound? A House Financial Services Committee hearing about the GameStop trading frenzy, scheduled for Feb. 18, will shine a light on Robinhood and stock trading. His company invested in Melvin Capital after its GameStop losses and makes money by executing trades on behalf of Robinhood (and some other retail brokers). Robinhood CEO Vlad Tenev was in the hot seat for much of the hearing, as House Democrats and Republicans alike excoriated his company. The congressional hearing about the “meme stock” frenzy shows it was definitely bizarre, but maybe not as meaningful as we desire. Mr. Gill, a recent MassMutual employee, whose longtime advocacy of GameStop and huge gains during the meme stock craze made him an icon, spoke bluntly about the company’s upsides and defended the integrity of publicly discussing his trades: “In short, I like the stock.” Mr. Huffman of Reddit also seemed sensible, explaining to lawmakers that Reddit’s forums are moderated by users themselves. And here ’ s center was Vlad Tenev was in the hot seat for much of the saga of articles... Officer Michael Blaugrund excoriated his company ’ d like to hear what you about..., was in attendance Thursday too particularly among Democrats s our email: @. Narrow as possible as well as we desire be as narrow as possible form of illegal manipulation... As wide as possible as well retail investors got in on the market bizarre. 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