Attorney Bob Frenchman, who specializes in finance and securities, argues the SEC has not stepped in because it is ‘not at all clear’ anything illegal has happened.
Robinhood CEO Vlad Tenev has reportedly been asked to testify on Capitol Hill amid recent trading turmoil triggered by average investors.
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The House hearing has been called by the Financial Services Committee for Feb. 18, as reported by Politico, which cited people familiar with the matter.
The hearing has yet to be formally announced.
Spokespeople for the House Financial Services Committee and Robinhood did not return FOX Business’ request for comment.
ROBINHOOD, AMID CHAOS, RAISES $3.4 BILLION IN TOTAL
Traders have been using the Robinhood app to outwit hedge funds that had bet against – or shorted – financially challenged companies like GameStop, AMC and Bed, Bath & Beyond. While those Wall Street firms had bet that the prices of these battered companies would continue to fall, nonprofessional investors linked up through social media platform Reddit to scoop up shares.
The result was a massive spike in the stock prices of these companies – which caused hedge funds to lose money.
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Last Thursday, Robinhood limited access to stocks – like GameStop – that the day traders had been scooping up, which drew widespread scrutiny.
Rep. Alexandria Ocasio-Cortez, D-N.Y., called the decision to halt purchases “unacceptable.”
Sen. Elizabeth Warren, D-Mass., went after Wall Street firms that she said have treated the market like their personal “casino” for years.
The company then allowed trading to resume on Friday.
