Gill earned a handsome profit and a legion of online followers for making the case for GameStop shares on Reddit and YouTube long before the big price surge in January. Gill is known for his cat-themed T-shirts and a bright red runner’s headband in widely followed videos.
He wore a jacket and tie for his appearance via video for the hearing — although the headband could be seen hanging on poster of a kitten with the words “Hang in There.”
Gill told the lawmakers he reaped a profit on his investment because he did his homework, and not because he touted the stock to “unwitting investors.”
“I did not solicit anyone to buy or sell the stock for my own profit,” Gill said.
The panel is floridly titled “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide.”Also on rt.comInvestors file CLASS ACTION SUIT against Robinhood over GameStop ‘stonk’ suppression
Robinhood is currently facing a class-action suit by Reddit traders for allegedly “purposefully, willingly and knowingly” depriving retail investors of the ability to buy certain stocks, consciously “manipulating” the market “for no legitimate reason.” The move, the plaintiffs say, was designed to benefit “large institutional investors” – that is, the hedge funds whose short positions on $GME and similar stocks ended up costing them billions of dollars in losses.
Zeldin asked Schulp about the potential for Chinese entities with ties to the CCP to receive personally identifiable information (PII) or other user data from their broker dealers. Schulp agreed it is a potential national security concern, arguing that PII and other material data rules should be applied equally to both on and offshore companies.
Lynch asked if it would be appropriate to put some of these trading platforms under the same regulations as FINRA, to protect the integrity of the system. Schulp agreed there needs to be integrity on the platforms but not necessarily through Regulation Systems Compliance and Integrity.
Retail Investor Protection Reps.
Nydia Velazquez (D-N.Y.), Jake Auchincloss (D-Mass.), Cindy Axne (D-Iowa), Torres and Meeks expressed concern about the “gamification” of investing on the Robinhood platform.
Retrieved February 18, 2021.
Huffman concluded that the events in January raised important issues about fairness and opportunity in the financial system.
In his testimony, Gill noted that he does not have clients nor does he provide investment advice in either his personal or employment capacity.
Kustoff specifically mentioned amending Section 230; Huffman expressed support for the law initially created to protect internet forums talking about stocks.
Hollingsworth asked about the implication of increased trading off-exchange. Griffin said the more trading that happens on exchanges, the better price discovery we have, but unfortunately exchanges are handcuffed in their ability to be better competitors.
He said much can be done by the SEC as the next step forward in Regulation NMS.
Hill asked if the SEC should investigate the WallStreetBets Reddit platform as it relates to Section 9(a)(2) of the Securities Exchange Act on inducing trading. Schulp said although the nature of this forum could lend itself to deceptive behavior, they have seen little evidence that would meet a test for manipulation.
Chuy García (D-Ill.) asked Citadel, based on their claim to be the largest destination for retail trading, if they consider themselves a systemically important financial institution (SIFI), but Griffin said he does not view Citadel as part of this category. Foster asked Robinhood if they would support a mechanism allowing customers to compare execution quality statistics.
Tenev and Griffin explained the difficulty in comparison because the quality naturally varies based on size and channel of the order. Tenev said he is generally supportive of greater transparency.
T+2 Settlement Cycle
Huffman said that Reddit does not require users to reveal their identities but has a large team dedicated to ensuring the platform is as unmanipulated as possible, saying in this case they did not see any signs of manipulation or nefarious behavior.
Regulatory Next Steps Reps. Ann Wagner (R-Mo.) and Rose said rather than new regulatory burdens that could have unintended consequences, Congress needs to reduce barriers to market participation to continue allowing main street Americans to invest better for their future.
In contrast, Reps.
Trey Hollingsworth (R-Ind.), French Hill (R-Ark.) and Kustoff asked about areas in need of policy review or further investigation.
She noted the events illuminated potential conflicts of interest and the predatory ways that certain funds operate and demonstrated the enormous potential power of social media in the markets. Waters claimed that the events also raised issues involving gamification of trading, potential harm to retail investors, and the business models of apps used by retail investors.
She noted that many of the retail investors appeared motivated by a desire to “beat Wall Street at its own game,” and given many retail investors’ losses, there are many who had their beliefs that the financial system is “rigged against them” reinforced.
Plotkin said that Melvin Capital was not bailed out during these events, and explained that Citadel proactively reached out to become a new investor as an opportunity to buy low and reap returns for their investors if and when Melvin Capital’s funds increased. Plotkin argued that most investments are long; after extensive research, the firm occasionally might short certain stocks for the long-term because when markets go down, Melvin Capital has a duty to protect their investors. He asserted that none of Melvin Capital’s short positions were an attempt to artificially depress or manipulate the price of stock, and that Melvin Capital complied with all securities laws surrounding shorting stocks. Melvin Capital, he noted, has had a short position in GameStop for six years.
His testimony explained that Robinhood’s decision to halt securities was driven by a need to meet federal clearinghouse deposit requirements, and refuted a number of theories that accused Robinhood of colluding with hedge funds during the squeeze.
In its July 1, 2021 S-1 filing with the SEC, Robinhood disclosed that the US Attorney’s Office had executed a search warrant for Tenev’s cell phone as part of a probe into the GameStop short squeeze.
YearAwardsCategoryResultRef.2016Forbes 30 Under 30Young TradersWon2022Forbes 30 Under 30 Hall of Fame
He was invited to be the keynote speaker at UCLA’s 2019 Math Commencement Ceremony.
Tenev is married to Celina A.