'Unacceptable': AOC calls out Robinhood for blocking GameStop purchases and suggests holding a hearing on it
- AOC said that Robinhood barring users from buying GameStop shares was "unacceptable."
- Major trading platforms have banned purchases of GameStop and AMC shares.
- AOC said the House Financial Services Committee should investigate the matter if necessary.
Rep. Alexandria Ocasio-Cortez of New York called the stock-trading platform Robinhood's blocking purchases of GameStop stock "unacceptable" and called for the House Financial Services Committee to investigate if necessary.
The trading platforms Robinhood and Ameritrade have halted users from purchasing shares of certain companies that Reddit users have been buying up.
Through January, investors and members of the popular Reddit forum Wall Street Bets - which has more than 2 million members - have helped to push up shares of GameStop, AMC, Nokia, and BlackBerry. Major hedge funds had been heavily shorting, or betting against, those stocks.
Read more: One chart shows how 3 GameStop shareholders gained nearly $4 billion in a week
The Redditors making the trades have brought in big money for themselves and caused headaches for the hedge funds that shorted GameStop shares. But critics have accused the traders of manipulating the market and creating a bubble that's bound to burst.
"Inquiries into freezes should not be limited solely to Robinhood," Ocasio-Cortez added. "This is a serious matter. Committee investigators should examine any retail services freezing stock purchases in the course of potential investigations - especially those allowing sales, but freezing purchases."
Figures around the financial world and across the political spectrum have sharply criticized the trading platforms' move to block purchases. Other critics include Barstool Sports founder Dave Portnoy, Donald Trump Jr., and Republican Sen. Ted Cruz, who responded to Ocasio-Cortez's tweet, "Fully agree."
Ocasio-Cortez shot back at Cruz in a follow-up tweet that referred to the insurrection at the Capitol on January 6.
"I am happy to work with Republicans on this issue where there's common ground, but you almost had me murdered 3 weeks ago so you can sit this one out," she wrote. "Happy to work w/ almost any other GOP that aren't trying to get me killed. In the meantime if you want to help, you can resign."
Two of Ocasio-Cortez's progressive Democratic colleagues, Reps. Rashida Tlaib of Michigan and Ro Khanna of California, who represents Silicon Valley, got behind her call for House hearings over the matter.
"We need an investigation into RobinhoodApp's decision and who influenced that," Khanna tweeted. "And this shows the need for a financial transaction tax on hedge fund shorting and SEC regulations on short selling practices."
Read more: GameStop plunges as much as 60% after Robinhood curbs trading on wildly volatile morning
On Wednesday, Ocasio-Cortez and Sen. Elizabeth Warren - a leading expert on consumer-protection law who has long advocated stricter restrictions on the financial industry and Wall Street - accused Wall Street critics of the Reddit traders of hypocrisy.
"Gotta admit it's really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino," Ocasio-Cortez tweeted on Wednesday.
Warren argued that "for years, the same hedge funds, private equity firms, and wealthy investors dismayed by the GameStop trades have treated the stock market like their own personal casino while everyone else pays the price." She called on regulators to "wake up and do their jobs."
- Read more:
- Furious traders are tanking ratings for Robinhood and other apps after outages and limits on buying GameStop
- These hedge funds got torched by the Wall Street Bets army that targeted their short positions in GameStop
- The 4 main reasons that GameStop stock became the target of a Reddit forum with more than 2 million members