Robinhood, the citadel likely to testify at the hearing
A Congressional hearing scheduled for Feb. 18 into the Robinhood GameStop business debacle is expected to gather testimony from Robinhood, Melvin Capital and Citadel Securities, Reuters reported Wednesday (February 10) citing sources.
The House Financial Services Committee looks into the trading frenzy that has seen some stocks, like GameStop and AMC, escalate quickly and unexpectedly, while hedge funds like Melvin have sold stocks short and have been hit hard.
Melvin lost 53% of its $ 12.5 billion in assets in January as retail traders appeared to attack hedge funds.
The hearing is expected to be just the start of several inquiries into what happened those days and weeks in January.
Citadel Securities has come into play in its business relationships with companies like Robinhood and in the way payments and orders go. Citadel Securities manages 20 percent of all US equity volume and 39 percent of retail volume, according to its website, per Reuters.
the Federal Trade Commission Last week, he said he received more than 100 complaints about Robinhood between January 24 and February 2. The previous week he had received a total of seven. Complaints ranged from inability to cash in or change businesses.
The trading frenzy forced Robinhood to restrict trading in GameStop, AMC and other stocks due to volatility, a move that caused an uproar among users and lawmakers. Some people have sided with the hedge fund managers who sold these stocks short. Robinhood said it had no choice but to restrict purchases to meet capital needs.
the The GameStop saga could have wiped the rug out from under Robinhood’s plans for an Initial Public Offering (IPO). The Security and Exchange Commission (SEC) is investigating GameStop’s business fiasco and several lawsuits are pending. Congress is also reportedly reviewing restrictions on trading in hedge funds, including short selling.
In one PYMNTS interview, Yinon Ravid, CEO of application-based financial advisory firm Albert, said expanding access and availability of financial advice can help this new generation of younger, digital-savvy investors.