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Live politics updates: Robinhood CEO admits company ‘made mistakes’ during GameStop trading frenzy

Savannah Behrmann, Courtney Subramanian and Jessica Menton, USA TODAY
·5 min read
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Rep. Ocasio-Cortez asks Robinhood CEO about turning a profit

Rep. Alexandria Ocasio-Cortez asked Vlad Tenev, CEO of the stock trading app and retail brokerage Robinhood, about “a failure to properly account for your own internal risk.”

She asked Tenev if he'd be willing to pass on the proceeds of payment flows over to Robinhood customers. Tenev did not commit to doing so.

Ocasio-Cortez continued to ask if he would not be willing to do so because “if removing the revenues that you make from payment for order flow would cause the removal of free commission, doesn’t that mean that trading on Robinhood isn’t actually free to begin with because you're just hiding the cost, the cost in terms of potentially poor execution or the cost of lost rebates to your customers?"

Tenev replied Robinhood is “a for-profit business and needs to generate some revenue to pay for the costs of running this business.”

Ocasio-Cortez has been displeased with Robinhood’s decision to block investors for trading stock since the incident, calling it “unacceptable” in late January.

More: 'Almost had me murdered': AOC slams Cruz for his efforts to overturn the election

Savannah Behrmann

Robinhood CEO admits company ‘made mistakes’ during trading frenzy

Vlad Tenev, CEO of the stock trading app and retail brokerage Robinhood, told the House Financial Services Committee the company made mistakes during the tumultuous market volatility following Reddit-fueled trading.

Tenev apologized to the committee, saying, "Look, I'm sorry for what happened. I apologize, and I'm not going to say that Robinhood did everything perfect.”

He said Robinhood has “made mistakes” and “as an organization will learn from this, and improve, to make sure it doesn't happen again."

Tenev explained later Robinhood had halted trading in GameStop, temporarily prohibiting customers from harvesting profits, because of the “positive collateral requirements imposed by our clearinghouses.”

Savannah Behrmann

Waters questions CEO’s in GameStop Hearing

Rep. Maxine Waters, D-Calif., the chairwoman of the House Financial Services Committee, grilled Robinhood CEO Vlad Tenev and Citadel CEO Kenneth Griffin during the GameStop hearing on Thursday.

In rapid-fire questioning, Waters demanded Tenev and Griffin simply answer “yes or no” to her questions.

Waters pressed Tenev to answer whether Robinhood had liquidity problems in a tense back-and-forth.

Tenev responded they “always felt comfortable with our liquidity,” and continued to give extended answers, including that the “additional capital we raised wasn’t to meet capital requirements.”

Waters interrupted a few times, pressing “please answer yes or no” and “I don’t have time, I just need a yes or no answer.” She continued to reclaim her time.

The California Congressman used the same style of questioning with Griffin.

Savannah Behrmann

GameStop hearing: Robinhood, Reddit CEOs to testify before Congress

Some of the biggest players in last month’s GameStop trading frenzy will face a congressional grilling Thursday from House members who have largely been critical of Wall Street.

The House Financial Services Committee will hold a virtual hearing at noon EST, looking into whether market manipulation was involved in the event after a band of small-time investors helped boost GameStop shares.

They are also looking into whether Robinhood and other brokerages that temporarily restricted trading in GameStop shares and other stocks were in compliance with federal regulations.

CEO’s for Robinhood, Reddit, and other companies are expected to testify.

More: 'Looking down their nose at you': GameStop frenzy showed a fresh contempt for hedge funds. Why do Americans hate them?

Democrats have mostly stood with the Redditors, who largely organized the purchase of the volatile stocks, after Robinhood blocked it’s users from continuing to buy shares. They wish to see the Securities and Exchange Commission increase capital and disclosure requirements for brokerages and hedge funds.

Republicans have also been critical of Robinhood, but wish to clarify the narrative surrounding the regulations and timeline of settling stocks.

Rep. Patrick McHenry, R-NC, the Republican ranking member on the committee, told Cheddar he supports the hearing to learn more about Reddit users “outsmarting and outwitting hedge funds” and explained he thought this controversy garnered such bipartisan criticism because it was a “power to the people moment."

– Savannah Behrmann and Jessica Menton

President Biden postpones trip to Pfizer plant until Friday

DETROIT – The White House has postponed President Joe Biden's scheduled trip to Michigan, delaying his tour of a Pfizer facility in Portage until Friday, according to sources familiar with the visit.

Inclement weather is expected in the Washington, D.C., area on Thursday; the National Weather Service issued a winter storm warning and predicts 3 to 6 inches of snow.

The visit underscores the importance of COVID-19 vaccines to the state, country and Biden's tenure: the safe and quick distribution of effective vaccines means a potential return to normalcy and all of the corresponding economic and societal impacts that entails.

Increasing vaccinations is a key part of Biden's expansive COVID-19 relief package, which includes money to reopen schools and businesses and doling out $1,400 checks to lower income Americans. The president has used his first trips outside of the Washington area and his home state of Delaware to pitch Americans on the recovery package, which has a $1.9 trillion price tag congressional Republicans have balked at.

More: 'Now is the time we should be spending': Biden pitches $1.9 trillion COVID relief

"Now's the time we should be spending. Now is the time to go big," Biden said of his proposal, known as the American Recovery Plan, during Tuesday's CNN town hall in Milwaukee.

The president and his aides have dismissed Republicans pushback, arguing the administration is delivering on its promise of bipartisan government through the proposal's broad support among Americans.

A recent Quinnipiac University poll found 68% of Americans support passage of the legislation, including 37% of Republican voters, 68% of independents and 97% of Democrats.

– Courtney Subramanian and Detroit Free Press

This article originally appeared on USA TODAY: Live politics updates: Robinhood CEO admits company ‘made mistakes’