Several key players in the GameStop saga, which destabilized Wall Street at the end of January, defended themselves on Thursday for having sought to manipulate the market in the face of American deputies anxious to shed light on certain practices of hedge funds and brokerage platforms .
Read also: Wall Street bubble: why the GameStop revolt is not a class struggle in finance
The video conference hearing of the House of Representatives' Financial Services Commission began at noon Washington time (5:00 p.m. GMT).
"Our role is to ensure fairness in financial markets and systems, strong protections for investors and responsibilities for Wall Street,"
said Maxine Waters, Democratic Chairperson of the Commission
,
in her opening remarks.
A movement of panic seized the New York Stock Exchange last month when an army of amateur investors, trading in particular on a forum of the site Reddit, invested massively in several companies in the failing financial health, in particular the chain of GameStop video game stores.
The group's stock suddenly surged before giving up much of its gains in the following weeks.
By focusing on GameStop and a few other companies, the stock marketers wanted to prove the big hedge funds and Wall Street barons wrong, who had bet on a stock market collapse of these companies.
Apologies from the Robinhood app
Several brokerage platforms had found themselves under fire from critics for having limited, at the height of the speculative fever, the purchases of the title GameStop and other businesses highly sought after by small carriers.
The Robinhood app, popular with millennials, had received an avalanche of negative comments, with many accusing the company of being behind the investment funds it does business with.
Faced with deputies on Thursday, his boss, Vlad Tenev, apologized to his clients but assured that he had received
"no pressure"
.
He reiterated that Robinhood had to impose restrictions to meet the liquidity levels demanded by clearing houses to ensure that stock transactions are completed.
Tense discussions also took place between MPs and financier Ken Griffin, founder of the hedge fund Citadel, around
“payment for order flow”
.
This controversial practice allows brokerage platforms to remunerate themselves on a transaction by benefiting from a preferential rate from a market maker (of which Citadel is a part).
"Roaring kitten"
Another highlight of the hearing was testimony from Keith Gill, who rose to fame on Reddit and YouTube for betting on a GameStop hike long before the January saga.
The one who notably calls himself “Roaring Kitty” on the internet presented himself as a non-institutional investor who had studied the GameStop model in depth.
“I'm not a cat,”
he joked at the start of the session.
Two other hearings are scheduled during which stock market regulators and experts from the world of finance will speak to MEPs.
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