Robinhood eases trading restrictions after public backlash
FOX Business’ Kristina Partsinevelos breaks down what’s happening with the brokerage app Robinhood and how users reacted to the company limiting trading this week.
Embattled mobile brokerage platform Robinhood is seeking to hire a lobbyist to defend its interests on Capitol Hill ahead of likely congressional hearings on its involvement in the GameStop stock trading controversy.
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Robinhood posted a listing Friday for a “federal affairs manager” on Daybook, a job board for public policy professionals. The listing went live as executives at the popular day-trading app face bipartisan criticism from lawmakers over their decision to restrict transactions involving shares of GameStop and other stocks embraced by retail investors.
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“This role will focus on federal advocacy and government affairs related to legislative and regulatory matters, and will report to our Deputy General Counsel of Litigation, Regulatory Enforcement & Investigations, and Government & Regulatory Affairs,” the job description says.
It’s unclear if the latest posting was directly related to calls for Congress to hold hearings on Robinhood’s handling of the situation and the circumstances that led to unprecedented volatility for a number of stocks this week. A posting with the same title on the job board Indeed has been live for more than 30 days.
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Robinhood representatives did not immediately respond to a request for further comment on the job posting.
The Democratic heads of the Senate Banking Committee and the House Financial Services Committee have each indicated that they will move forward with hearings on the GameStop trading frenzy. Meanwhile, the U.S. Securities and Exchange Commission pledged to “closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities.”
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A handful of stocks favored by the Reddit group “WallStreetBets” spiked in value this week as users bought up shares. The surge prompted a “short squeeze” on hedge funds that were betting against the stocks, which included GameStop, BlackBerry and AMC Entertainment, forcing them to buy more shares to cover their losses.
Critics of Robinhood and other platforms that enacted trading restrictions have argued they did so at the behest of Wall Street hedge funds at risk of insolvency. The platforms have denied those allegations and stated the restrictions were meant to mitigate risk.
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