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Congress announces hearings on the stock market in light of Robinhood v. Reddit battle

Legislators are responding fast to the madness surrounding Gamestop and AMC shares and the hedge funds selling them short.

On Jan. 28, Chairwoman of the House Financial Services Committee Maxine Waters announced a coming hearing on short-selling. Sherrod Brown, the incoming chairman of the Senate Banking Committee, similarly called for a re-examination of stock market rules.

According to Cointelegraph, short selling has been the subject of widespread controversy as the past two days have seen wild volatility for certain securities, particularly Gamestop (GME). Retail traders, communicating via Reddit and buying on Robinhood, have been busy buying up GME in the face of soon-to-expire short positions from several major hedge funds.

Robinhood and a number of other platforms aimed at retail investors cancelled buying on GME, in what many have been calling unfair collusion with the hedge funds in question. Waters stated:

“I will convene a hearing to examine the recent activity around GameStop (GME) stock and other impacted stocks with a focus on short selling, online trading platforms, gamification and their systemic impact on our capital markets and retail investors.”

Alexandria Ocasio-Cortez and Rashida Tlaib, who both sit on the House Financial Services Committee, both declared their firm opposition to Robinhood’s action, with AOC calling for a hearing as well.

Sherrod Brown expressed a similar sentiment in his announcement: “People on Wall Street only care about the rules when they’re the ones getting hurt.”

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