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Rep. Maxine Waters Says She Wants Redditor Keith Gill, Robinhood And GameStop At A Congressional Hearing

Rep. Maxine Waters Says She Wants Redditor Keith Gill, Robinhood And GameStop At A Congressional Hearing

Maxine Waters
Rep. Maxine Waters, D-Calif., speaks as the House of Representatives debates the articles of impeachment against Donald Trump at the Capitol in Washington, Dec. 18, 2019. (House Television via AP)

Rep. Maxine Waters, the chairwoman of the House Financial Services Committee, wants to hear testimony at a congressional hearing from Reddit trader Keith Gill, trading app Robinhood, GameStop and some hedge funds about the short squeeze that rocked Wall Street.

Waters said Congress is looking at the role of short selling and online trading platforms in the recent GameStop buying massacre. She’s working on the invitation list for a Feb. 18 hearing.

“I have my wish list but it’s not finalized yet,” she told Bloomberg in a Feb. 3 report. “I’m trying to get everybody that, you know, has a role to play. I want Reddit there. I want Robinhood there. I even want GameStop there. And I want a couple of the hedge funds there. I’m looking at Citadel and Melvin Capital.”

Most retail investors used the Robinhood brokerage to bet that the stock price of video-game retailer GameStop would go up, Bloomberg reported.

Keith Gill, a Redditor on the WallStreet Bets forum who goes by the name “DeepF***ingValue,” shared regular updates on his GameStop investment and says he lost more than $13 million in a single day when the shares crashed.


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Melvin Capital Management, the hedge fund that bore the brunt of losses from the soaring stock prices of recent heavily shorted stocks, lost 53 percent on its investments in January, Wall Street Journal reported.

Citadel Securities, a market maker that pays Robinhood for the right to execute its clients’ stock trades, bailed out Melvin to the tune of $2 billion for its losses on GameStop.

Within the space of five days, Robinhood received $3.4 billion from existing investors in capital infusion to cover increased demands at clearinghouses where trades are processed.

“Just to be clear, Citadel, one of the largest clients of RobinHood, bailed out Melvin. Days later, RobinHood shut down purchases of $GME and other volatile names. Yes, the game is still rigged,” Nate Anderson tweeted.

Robinhood infuriated customers when it restricted them from buying new shares, citing liquidity and compliance issues.

“I am not starting this hearing taking sides or believing that Robinhood is guilty of anything,” Rep. Waters told the live streaming financial news network Cheddar. “As a matter of fact, this hearing is going to be educational. It’s going to be a learning experience for everybody.” 

Waters said she needs to know how laws regulating reserve and liquidity requirements applied to Robinhood. She also said that she does not yet understand Robinhood’s justification for restricting buying activity of stocks targeted by retail investors.

Water said she would come to the hearing with more information from the Securities and Exchange Commission and the Financial Industry Regulatory Authority. “We’re open-minded. We’re going to listen,” she said. 

The committee will look into how Robinhood makes money and investigate its relationship with Citadel. It will also look into resentment about short selling, Waters said.

“I suspect that there is resentment, and I think there’s resentment against short selling,” she said. “I think there’s resentment against hedge funds being able to borrow and to drive down the price of stock, and so I think that that will be looked at.”

In a Jan. 28 press release, Waters said that hedge funds have a long history of predatory conduct. “That conduct is entirely indefensible,” she said. “Private funds engaging in predatory short selling to the detriment of other investors must be stopped.

“Addressing that predatory and manipulative conduct is the responsibility of lawmakers and securities regulators who are charged with protecting investors and ensuring that our capital markets are fair, orderly, and efficient,” Waters continued. “As a first step in reining in these abusive practices, I will convene a hearing to examine the recent activity around GameStop (GME) stock and other impacted stocks with a focus on short selling, online trading platforms, gamification and their systemic impact on our capital markets and retail investors. 

“We must deal with the hedge funds whose unethical conduct directly led to the recent market volatility and we must examine the market in general and how it has been manipulated by hedge funds and their financial partners to benefit themselves while others pay the price.” 

A Twitter user questioned whether Rep. Maxine Waters can be impartial: “Hedge Fund industry is a top contributor to Maxine Waters. One of the top contributor is Apollo Global Management started by Leon Black who was forced to resign in the wake of an investigation into his relationship with Jeffrey Epstein”.

Another Twitter user asked, “@RepMaxineWaters are you gonna inquire @KLoeffler for insider trading too?!”

Former Georgia Sen. Kelly Loeffler and other senators were investigated for claims that they used insider information following a January 2020 coronavirus briefing. The Department of Justice dropped the investigation against Loeffler in May 2020.

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“Don’t be fooled by her ‘this is going to be educational'”, Bobby @Flacwby tweeted. “Her only goal is to make sure Melvin Capital get’s their money back and that big banks don’t ever have to worry about this again. She and her husband have made millions from the financial sector and she owes them favors.”

Waters defended the right of members of Congress to invest and said she opposes a blanket ban of trading activity.

“What I think is that members of Congress should be allowed to invest, should be allowed to earn a living in all of the ways (that are) open to the average public, but insider trading absolutely cannot be allowed,” Waters said, according to Cheddar. Those who get caught should “pay the price”, she added.