• February 28, 2024

Keith Gill says ‘I am not a cat’ in GameStop hearing

The GameStop saga took center stage on Thursday as lawmakers held a congressional hearing to investigate what happened during last month’s trade frenzy after the event sparked a series of federal investigations into possible market manipulation.

The virtual hearing, held by the House Financial Services Committee, was chaotic at times as lawmakers cut and grilled key players involved in the episode, including the executives of Reddit, Robinhood, electronic trading company Citadel Securities and hedge fund Melvin Capital.

Also in attendance was investor Keith Gill, known as “DeepF-ingValue,” who spearheaded the frenzy on the r / WallStreetBets Reddit forum.

Last month, a group of retail investors on Reddit helped get GameStop stock up 1,000% in just two weeks, helping them hit $ 500 in pre-market trading. The surge surprised hedge fund short sales and was initially viewed by many retail investors as the common man’s victory over wealthy Wall Street investors.

Thursday’s hearing, dubbed “political theater” in some places, did not disappoint those looking for a bit of drama and humor.

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During his testimony on video, Gill, also known as “Roaring Kitty” on YouTube, showed off a poster of a kitten with his red headband that he usually wears in the background during his live streams.

“I’m not a couple of things,” said Gill, a suburban day trading father, at the beginning of his address. “I’m not a cat.”

His cheeky remark sounded like a reference to a Zoom filter faux pas last week in the A lawyer at a virtual court in Texas had a cat filter over his face.

GameStop’s shares briefly jumped when Gill spoke. The struggling video game retailer, which had been trading around $ 44 around midday prior to the hearing, soared above $ 48 after his opening speech. The shares later fell below $ 41.

Robinhood and Citadel Securities, along with Melvin Capital, faced the greatest legislative scrutiny. Steve Huffman, CEO of Gill and Reddit, felt less heat, however.

Legislators were checking whether Robinhood and other brokers temporarily restricting trading in GameStop and other stocks were complying with federal regulations.

Rep. Maxine Waters, D-Calif., Chair of the House Financial Services Committee, barbecued Robinhood CEO Vlad Tenev and Citadel CEO Kenneth Griffin. In the Rapid Fire survey, Waters asked Tenev and Griffin to answer their questions simply with “yes or no”.

Waters pressed Tenev to answer if Robinhood had liquidity issues in a tense back and forth.

Tenev responded that they “have always been comfortable with our liquidity” and continued to provide elaborate responses, including the fact that “the additional capital we raised does not meet capital requirements”.

Waters was interrupted a few times and hit “Please answer yes or no” and “I don’t have time, I just need a yes or no answer.” She went on to regain her time.

The California Congresswoman questioned Griffin the same way.

Waters denied GOP Michigan Rep. Bill Huizenga, who called the hearing “political theater”.

“I appreciate all of the members attending today,” said Waters. “This is not a political theater at all.”

In another heated exchange, Griffin asked questions from Rep. Brad Sherman, D-Calif., Who pressured the hedge fund billionaire to “pay for the flow of orders,” a controversial practice in which trading companies pay online brokers for customer orders execute.

“Does the Robinhood customer get the same price as the Fidelity customer?” Asked Sherman Griffin, trying to avoid the question.

“You’re doing a great job of wasting my time,” Sherman said to Griffin. “If you go to the filibuster, you should run for the Senate.”

Alexandria Ocasio-Cortez, DN.Y., Rep., Who criticized Robinhood for promoting “free trade,” put Tenev on the company’s practice of “paying for the flow of orders,” which generate most of the company’s revenue.

Tenev argued that instead of charging commission, selling customer orders “enables commission-free trading”.

He once apologized to customers for restrictions put in place in late January that prevented them from buying shares in GameStop and other high-flying stocks.

“Despite the unprecedented market conditions in January, what happened is unacceptable to us,” said Tenev. He added that the online broker is “doing everything possible to make sure this doesn’t happen again”.

In closing remarks, Waters announced on Thursday that there will be two more hearings related to the GameStop saga, one with the Securities and Exchange Commission and the financial industry regulator and another with securities professionals.

Jerome Selvers, attorney at Sonnenblick, Parker & Selvers and a former SEC division and enforcement attorney, doesn’t expect any comprehensive laws or regulations to follow after Thursday’s hearing.

“If the SEC wanted to do something, there are sufficient resources available under the applicable laws,” said Selvers. “The hearing will be made public, but I don’t think it will create any new law, rule or regulation.”


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