Lawmakers Demand Probe into Trading App Robinhood After It Blocked Stock Sales That Hurt Hedge Funds

HeadlineJan 29, 2021

Lawmakers are demanding a congressional investigation into the trading app Robinhood, after it stopped allowing users to purchase stock in the video game retailer GameStop and other companies. GameStop’s share prices have swung dramatically in recent weeks – at one point surging by over 1,800% – after amateur investors on Reddit boosted its price, costing billions of dollars in losses to major hedge funds that were betting on its share price to fall.

A class action suit brought Thursday accuses Robinhood of manipulating the open market to benefit hedge funds at the expense of amateur traders. New York Democratic Congressmember Alexandria Ocasio-Cortez tweeted in response, “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.” She added, “Anyways, Tax the Rich.” 

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