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Waters at Second Hearing on Ongoing Market Volatility: The Committee Must Assess Legislative Next Steps

Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, gave the following opening statement at a full Committee virtual hearing entitled, “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide, Part II.” 

Good morning every one. Today this Committee convenes for our second hearing on the ongoing volatility involving GameStop and other stocks.  

In our first hearing on this matter, I called a number of those involved in those events to testify before the Committee. The goal was to get the facts. And so, we heard directly from the CEOs of trading app Robinhood, Wall Street firms Citadel and Melvin Capital, and social media company Reddit, as well as Keith Gill, one of the retail investors involved in WallStreetBets. 

The Committee asked those witnesses questions on a broad range of issues, touching upon topics including conflicts of interest and payment for order flow, gamification of trading and harm to retail investors, the process for clearing and settling stock trades in the United States, and the ways that social media and technology are changing the way our markets function, as well as other related issues. 

I concluded our first hearing by voicing my concerns on how Robinhood’s retail investors are sometimes treated more like a product than customers, and Robinhood’s actual customer, Citadel, with its expansive role in our capital markets, may pose a systemic risk to our financial system.  

Today, as a next step, I am convening this hearing with a panel of capital markets experts and investor advocates, so that the Committee can hear from their perspectives on these issues, and possible reforms. As the events in January cast a spotlight on gaps in regulation of our capital markets, the Committee must assess what legislative steps may be necessary.  

Following this hearing I plan to convene a third hearing to hear the perspectives from regulators who oversee these markets and are supposed to be putting investors first.  

My goal in continuing to scrutinize these events and the related policy issues, is to ensure that our capital markets are fair and transparent, that investors have strong protections, and that Wall Street is indeed accountable and beneficial to the American economy.

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