Report: Senior Biden admin officials including Treasury secretary Yellen to meet on Robinhood-GameStop frenzy

Feb 3, 2021 | The Block News | 0 comments

report:-senior-biden-admin-officials-including-treasury-secretary-yellen-to-meet-on-robinhood-gamestop-frenzy

U.S. Treasury Secretary Janet Yellen has set a meeting with key regulators that could take place as soon as Thursday to discuss last week’s market frenzy centered on brokerage app Robinhood and the stock of gaming retailer GameStop, according to a new report from Politico.

The Securities and Exchange Commission (SEC), the Federal Reserve, the New York Fed and the Commodities Futures Trading Commission (CFTC) are reportedly slated to attend. The discussion will focus on recent volatility and investor protection, according to a statement from the Treasury obtained by Politico.

GameStop (GME), AMC and other stocks saw a significant bump last week fueled by activity from users of the subreddit r/WallStreetBets. Many users bought with the intention of squeezing hedge funds out of short positions after one trader noticed significant open positions on GameStop. Others were more interested in riding the wave from about $17 to nearly $350 a share. On Wednesday, those shares are now trading around $94 apiece as of press time.

The market event drew significant attention to Robinhood, which later moved to temporarily restrict the retail purchase of some stocks, including GME. CEO Vlad Tenev said this was done to protect retail investors, with some accusing Robinhood of market manipulation to favor hedge funds.

The firm raised more than $3 billion this week from existing investors, which led some to speculate last week’s retail trading pause could have been related to liquidity issues. Tenev has denied Robinhood has any liquidity problem.

Just after Robinhood’s decision to pause trading, the White House confirmed that Yellen was already “monitoring the situation” around Robinhood. The SEC later put out a statement saying it would “closely review actions” around the market craze. Thursday’s meeting will see the SEC present its findings to other regulators.  

Multiple members of Congress have said they are working across the aisle to set up a hearing for the firm. Tenev is expected to testify before the House Financial Services Committee on Feb. 18.

 

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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