What You Need to Know About Today’s GameStop and Robinhood Hearing

Elizabeth Warren Democratic Presidential candidate
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The House Financial Services Committee will meet today in a virtual hearing titled “Game Stopped? Who Wins and Loses when Short Sellers, Social Media, and Retail Investors Collide?

See: After GameStop, Regulations Are Coming for Wall Street – But Will They Reign in Everyday Investors Instead?
Find: Robinhood Registers in-House Lobbyists Amid Scrutiny over Recent Trading Restrictions

The title of the hearing says it all. In late January, a group of retail investors used the social media network Reddit — specifically, a subreddit called r/WallStreetBets — to drive up the price of GameStop stock along with a host of other investments dubbed “meme stocks.”

The Wall Street rally resulted in short sellers losing billions, and the Robinhood stock-trading platform ultimately blocked the purchase of GameStop shares. Here’s what you can expect from today’s hearing, plus where to watch it.

See:  Reddit Raises New Round of Funding, Doubles Its Valuation to $6 Billion
Find: Meet All the Major Players in the Robinhood vs. GameStop Saga

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Who Will Testify

Those who will testify before Congress include Vladimir Tenev, CEO of Robinhood Markets, Inc.; Kenneth C. Griffin, CEO of hedge fund Citadel LLC; Gabriel Plotkin, CEO of Melvin Capital Management LP; Steve Huffman, CEO and co-founder of Reddit; r/WSB member Keith Gill, aka YouTube’s Roaring Kitty.

Tenev Will Deny Allegations

Vladimir Tenev is expected to defend his restriction of the trade of GameStop and other stocks as the market rallied. He will also deny any relationship between hedge funds Citadel and Melvin Capital and the stock trading platform.

“Any allegation that Robinhood acted to help hedge funds or other special interests to the detriment of our customers is absolutely false and market-distorting rhetoric,” he stated in planned testimony, reported by CNBC.

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Keith Gill Will Insist GameStop Will Turn Itself Around

Gill’s prepared testimony will reiterate his faith in GameStop as a company, with Gill insisting, “I’m as bullish as I’ve ever been on a potential turnaround,” MarketWatch reports.

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He will trace his history of purchasing GameStop back to June 2019, noting that his investment made him a millionaire by December 2020. Additionally, his prepared testimony notes, “The idea that I used social media to promote GameStop stock to unwitting investors is preposterous,” according to MarketWatch.

MarketWatch also reports that the YouTube star and Massachusetts investor had only 529 YouTube subscribers and 550 Reddit followers in December 2020.

See: GameStop Stock Has Crashed and Burned – How to Recover If You Went All In
Find: Learn from the GameStop Frenzy with This Quick Guide to Short Selling

Sen. Elizabeth Warren Will Accuse Robinhood of Burying Customer Disclosure Statements

In perhaps the most surprising turn of events, Sen. Elizabeth Warren issued a statement accusing Robinhood of hiding consumer rights information “behind dozens of pages of legalese,” The New York Times reports.

Amongst the policies not made obvious by Robinhood were the platform’s prerogative to cut off trades with no notice and prohibit customers from suing the platform.

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During the hearing, Warren will call on the Securities and Exchange Commission to ban the practice of requiring customers to forfeit their right to sue stockbrokers, which is commonplace amongst not just Robinhood, but larger brokers, according to MarketWatch.

See: Robinhood Faces Slew of Lawsuits over Trading Freeze
Find: Robinhood Lifts All Trading Restrictions as GameStop Gains Evaporate

Where to Watch the Hearing

The hearing will take place on Thursday, Feb. 18, 2021, at 12 p.m. ET. Viewers can watch the livestream on The House Committee Financial Services’ YouTube channel. It will also be streamed on C-Span and CNET YouTube channels.

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About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.
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