I’ve offered my assistance to the House Financial Services Committee to prepare for their upcoming hearings concerning the GameStop, Reddit and Robinhood conflagration. I hope they take me up on it. Either way, here are the questions that the committee should be seeking answers to:
1. Is there any evidence that professional operators have infiltrated message boards and orchestrated these wild short squeezes or has this been an entirely grassroots phenomenon? How vulnerable are the millions of ordinary investors who rely on functioning markets to subsequent bouts of message board-driven mania?
2. Are there any records of conversations having taken place between hedge funds and Robinhood during the short squeeze episode? Were any requests or demands made to halt or slow down trading in the affected securities for the benefit of any parties?
3. What aspects of the Robinhood service or app should be reconsidered in light of the potential for fraud, abuse or massive losses inflicted upon the general public – even if those potential losses are self-inflicted by lack of education or experience? What safeguards should be adopted by fintech firms offering access to markets and speculation so that people are sufficiently warned about the risks they are taking?
4. What does it say about the state of our society and the current wealth inequality epidemic that millions of young people feel they need to resort to expressing their rage via brokerage account?
5. Did any hedge funds, market makers, private equity firms, broker-dealers or other sophisticated professional actors reap extraordinary profits as a result of taking advantage (or profiteering) from this episode?
What would you want to hear Congress ask? Tell me here.