Congress to hold hearings on the stock market after Reddit GameStop squeeze

Sen. Sherrod Brown (D-OH), the incoming chair of the Senate Banking Committee, announced Thursday that he plans to hold a hearing on the “current state of the stock market” in the wake of unprecedented volatility around GameStop, AMC, and other stocks.

The volatility has been most pronounced around the retailer GameStop, which has more than quadrupled in value over the past week in the face of a Reddit-organized campaign to boost the company’s value. But with several markets blocking further purchases of the stock to stem hedge fund losses, the incident has sparked a broader conversation about institutional bias in US financial markets.

“People on Wall Street only care about the rules when they’re the ones getting hurt. American workers have known for years the Wall Street system is broken — they’ve been paying the price,” Brown said in a statement Thursday. “It’s time for the SEC and Congress to make the economy work for everyone, not just Wall Street. That’s why, as incoming Chair of the Senate Banking and Housing Committee I plan to hold a hearing to do that important work.”

As of publication, it’s unclear when the hearing will take place, but lawmakers from both chambers have expressed a need for further investigation.

Rep. Maxine Waters (D-CA), the chair of the House Financial Services committee, also pledged to investigate the activity. “I will convene a hearing to examine recent activity around GameStop stock and other impacted stocks,” Waters said in a statement, “with a focus on short selling, online trading platforms, gamification and their systemic impact on our capital markets and retail investors.”

Earlier Thursday, Rep. Alexandria Ocasio-Cortez (D-NY) called on Congress to investigate the Robinhood app, calling the actions against GameStop “unacceptable.” Other progressives have followed suit. Rep. Ro Khanna (D-CA) put out a statement saying, “We’re done letting hedge fund billionaires treat the stock market like their personal playground, then taking their ball home as soon as they lose,” he continued. “We need more regulation and equality in the markets.”

On Wednesday, Sen. Elizabeth Warren (D-MA) also called for further regulation of the financial industry. “It’s long past time for the SEC and other financial regulators to wake up and do their jobs — and with a new administration and Democrats running Congress, I intend to make sure they do,” she said.