Warren Shares Responses to Oversight Letters on GameStop and Robinhood Controversy
Responses from SEC, FINRA, Robinhood and Citadel Provide New Details on the Regulatory Response and the Financial Arrangements of Key Market Players
Warren Concerned by Evasiveness from Citadel
Washington, DC - Ahead of the Senate Banking, Housing and Urban Affairs Committee hearing today, United States Senator Elizabeth Warren (D-Mass.) released responses to her oversight letters raising questions about market volatility and its consequences for individual investors in the wake of the GameStop and Robinhood controversy.
Senator Warren also released the following statement:
"I've received responses from the Security Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), Citadel, and Robinhood. Citadel in particular failed to provide clear answers to important questions-and their answers raised some new ones. The GameStop controversy revealed how the Wall Street game is rigged in favor of big hedge funds and giant corporations - and how this hurts individual investors and the economy. I'm going to keep fighting for answers, a level set of rules, and a transparent and open market for everyone."
On February 18, Senator Warren sent a letter questioning Citadel whose market-maker affiliate, Citadel Securities, is Robinhood's largest source of revenue through payments for order flow-, regarding its relationship with Robinhood. In another letter on February 18, Senator Warren called on FINRA to review Robinhood's role in destabilizing the market and questioned the regulatory organization on how it will protect individual investors from actions that result in an uneven playing field.
In January, Senator Warren requested that the SEC provide Congress and the public information on how it will address the dramatic swings in market valuation of GameStop and other companies and crack down on years of distortion in securities markets that have allowed the wealthy few to artificially inflate and deflate share prices and reap short-term profits while exacerbating wealth inequality.
Earlier this month, Senator Warren released a statement on Robinhood's response to her letter dated February 2, 2021, in which she raised questions about Robinhood's adherence to regulatory requirements and its contractual obligations to retail investors.
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