Commission-free trading app Robinhood faced bipartisan political pushback Thursday after restricting trades on GameStop and other highly volatile stocks — a decision that blocked DIY-investors from being able to buy and sell these certain securities but still allowed Wall Street to.
The trading restrictions angered political leaders on both sides of the aisle from Representative Alexandria Ocasio-Cortez to Senator Ted Cruz, who demanded to know why the brokers had blocked their customers while hedge funds could still trade through their own desks.
“This is unacceptable,” Ocasio-Cortez tweeted in response to the restrictions. “We now need to know more about [Robinhood’s] decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit.”
As a member of the Financial Services Committee, Ocasio-Cortez said that she would support a hearing if necessary. She continued that the inquiries shouldn’t be solely limited to Robinhood: “This is a serious matter. Committee investigators should examine any retail services freezing stock purchases in the course of potential investigations — especially those allowing sales, but freezing purchases.”
In a rare political moment, Republican Senator Cruz replied to the tweet minutes later, saying that he “fully” agreed with Ocasio-Cortez. But the response sparked ire from the New York congresswoman.
“I am happy to work with Republicans on this issue when there’s common ground, but you almost had me murdered 3 weeks ago so you can sit this one out,” Ocasio-Cortez said in reference to the Jan. 6 insurrection at the US Capitol, the same day Cruz had objected to the certification of Arizona’s 2020 election result, despite no evidence supporting claims of voting irregularities. Ocasio-Cortez continued: “Happy to work with almost any other GOP that aren’t trying to get me killed. In the meantime if you want to help, you can resign.”
Cruz said later Thursday, according to reports, “You know, there’s a lot of partisan anger and rage on the Democratic side. It’s not healthy for our country, it’s certainly not conducive to healing or unity, but everyone has to decide how they want to interact with others.”
The comments prompted Ocasio-Cortex to tweet: “What does he think the logical response to his lies should be? A hug? Maybe there’s anger bc his actions deserve accountability.”
Oh, there’s anger?— Alexandria Ocasio-Cortez (@AOC) January 28, 2021
Now why would there be anger that Cruz amplified known lies about our election that fueled an insurrection that cost ppl’s lives?
What does he think the logical response to his lies should be? A hug?
Maybe there’s anger bc his actions deserve accountability. https://t.co/92O6tYxzB3
Cruz was one of the top congressional backers of Trump’s baseless challenges to the election results, believing the 2020 election was stolen from Trump. The misinformation set the stage for the deadly Capitol siege, where Ocasio-Cortez and other members of Congress said they feared for their lives.
“Many, many members of the House were nearly assassinated,” Ocasio-Cortez said in an Instagram Live video earlier this month. “I had a pretty traumatizing event happen to me. And I do not know if I can even disclose the full details of that event due to security concerns but I can tell you that I had a very close encounter where I thought I was going to die.”
Last week, a Texas man who participated in the insurrection was arrested for tweeting “assassinate AOC.”
Ocasio-Cortez continued on Twitter Thursday: “This isn’t a joke. We need accountability, and that includes a new Senator from Texas.”
In a blog post later Thursday, Robinhood said it would allow its customers to resume trading on GameStop and other companies the app had blocked earlier in the day.
“Starting tomorrow, we plan to allow limited buys of these securities. We’ll continue to monitor the situation and may make adjustments as needed,” Robinhood said. “To be clear, this was a risk-management decision, and was not made on the direction of the market makers we route to,” the company said, referring to the large trading firms who pay Robinhood for the app’s business.
Some investors sued Robinhood Thursday for the losses they sustained after the company cut off trading in certain stocks. In protest, hundreds of thousands of users joined a campaign to give Robinhood’s app the lowest one-star review and drive the company’s rating down.
The situation has raised scrutiny of trading platforms like it, with the Security and Exchange Commission saying it was “actively monitoring” the trading.
Material from Globe wire services was used in this report.