The House Financial Services Committee is examining how an apparent flood of retail trading drove GameStop and other shares to extreme highs, squeezing hedge funds like Melvin Capital that had bet against it.
The witness list was announced on Friday by Congresswoman Maxine Waters and includes Keith Gill, who also goes by Roaring Kitty, Robinhood chief executive Vlad Tenev, Citadel chief executive Kenneth Griffin, Melvin chief executive Gabriel Plotkin and Reddit chief executive Steve Huffman.
The virtual hearing, entitled “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide,” will take place on Feb. 18 at 1200 ET (1700 GMT), according to the press release and will be livestreamed here https://financialservices.house.gov/live. Waters, a Democrat, is Chair of the House Committee on Financial Services.
Robinhood, Reddit, Melvin and Citadel have been at the center of the GameStop saga, which saw retail traders promote GameStop on the Reddit forum WallStreetBets. Robinhood emerged as a popular venue to trade the stocks but was criticized for temporarily restricting trading in the hot stock.
The GameStop surge resulted in massive losses for Melvin, after the hedge fund bet the retailer’s stock price would tumble. Citadel’s hedge funds, along with founder Griffin and firm partners, put $2 billion into Melvin.
Democrats and Republicans are united in their outrage by Robinhood’s decision to suspend trading in the so-called “meme stocks” on Jan. 28. Tenev said the company had to impose the restrictions after wild trading in the stocks triggered a $3 billion margin call by Robinhood’s clearing house, straining the company’s balance sheet.
Massachusetts securities regulators have also issued a subpoena seeking Gill’s testimony.
(Reporting by Michelle Price, additional reporting by Svea Herbst-Bayliss; writing by Megan Davies; Editing by Sonya Hepinstall)