- Oops!Something went wrong.Please try again later.
(Adds quotes throughout)
Feb 18 (Reuters) - At a grilling by lawmakers over thefrenzied trading in retailer GameStop, Keith Gill, aYouTube streamer known as Roaring Kitty, hedge fund managers andthe head of Robinhood and Reddit defended their actions.
Those testifying were Robinhood CEO Vlad Tenev, MelvinCapital CEO Gabriel Plotkin, Citadel CEO Ken Griffin and RedditCEO Steve Huffman.
Here are the testimonies https://docs.house.gov/Committee/Calendar/ByEvent.aspx?EventID=111207of the players involved and a link https://www.reuters.com/article/retail-trading-congress-profiles/the-wall-street-players-at-the-gamestop-hearing-idUSL1N2KK0EZto biographies of some of them.
Some quotes from the hearing:
"A few things I am not. I am not a cat. I am not aninstitutional investor, nor am I a hedge fund. I do not haveclients and I do not provide personalized investment advice forfees or commissions. I am just an individual whose investment inGameStop and posts on social media were based upon my ownresearch and analysis."
"Investing can be risky and my approach can be risky but forme personally, yes (I would buy GameStop now). Yes, I do find itattractive at this price point."
"My investment in Gamestock was based on the fundamentals."
"Increased transparency could help. That someone like mecould have a better understanding of how those things work ...would help retail investors."
ROBINHOOD CEO VLAD TENEV:
"We always felt comfortable with our liquidity... Theadditional capital we raised wasn’t to meet capital requirementsor deposit requirements... "
"I recognize customers were very upset (from therestrictions on trading)... it would have been significantlyworse if we had prevented customers from selling."
"Not at all, zero pressure (from anyone on the panel todecide to restrict trading), it was a collateral depositorydecision."
"I’m sorry for what happened. I apologize. I’m not going tosay that Robinhood did everything perfect and we haven’t mademistakes in the past, but what I commit to is making sure thatwe improve from this, learn from it, and we don’t make the samemistakes in the future. And Robinhood as an organization willlearn from this and improve and make sure it doesn’t happenagain, and I will make sure of that."
"I do believe that the ability for the same share to beshorted an indefinite number of times is somewhat of a pathologyand that should be fixed and I think step one of that ismodernizing the antiquated settlement infrastructure thateverything is built on. We simply don’t have the ability toproperly track which shares have been shorted and how many timesas they are moving through our settlement system."
"Robinhood owns what happened and we need to make sure itdoesn't happen again but Robinhood Securities had limitedoptions and I believe the team did the right thing and the onlything.
"Payment for order flow is one of our largest revenuesources. Yes (it is the largest.)"
CITADEL CEO KEN GRIFFIN
"As I was trying to explain... the quality of the executionvaries by the channel of the order, this is a commonlyunderstood phenomenon in economics."
"We have fought for 15 years to make that the basis by whichorders are allocated because we strongly believe Citadel isbetter to provide better execution for retail orders in the longrun."
"We are able to share our trading acumen with retailinvestors, give them a better price and give payments fororderflow to firms like Robinhood.
"This has been very important for the democratization offinance."
“I believe that the short interest in Gamestop wasexceptional. I’m not sure it’s worth us delving into legislativecorrections for a very unique situation."
"We of course are talking to Robinhood as we manage asubstantial portion of their order flow.
"Absolutely not (whether they contacted Robinhood aboutrestricting trading in GameStop)."
"We don't own DTCC. We are not party to the discussion/dialogue between DTCC and Robinhood. We have literally nothingto do with DTCC other than being a member of DTCC... CitadelSecurities owes a duty of best execution for every order thatcomes from Robinhood and I'm proud of how seriously our teamtakes that best execution."
MELVIN CAPITAL CEO GABRIEL PLOTKIN
"I think it is a really good question (regarding morereporting around shorting). It is not for me to decide. But ifthose are the rules then I will certainly abide by them."
"Anytime we short a stock, we locate a borrower. Our systemsactually force us to find a borrower."
"In 2014 at our inception (we took a short position inGameStop)
"I dont remember (what it was worth) at the time. Maybe $40.We believed the company had a lot of structural challenges.
"Our systems won't allow that (a naked short position) so itwouldn't be possible to do."
REDDIT CEO STEVE HUFFMAN
"We spend a lot of time at Reddit ensuring the authenticityof our platform. So we’ve got a large team dedicated to thisexact task. Everything on Reddit - all of the content is createdby users, voted on by users and ranked by users, and we makesure that that is authentic, and as unmanipulated as possible.And in this specific case, we did not see any signs ofmanipulation."(Reporting by John McCrank, Elizabeth Culliford, Svea Herbstand Noel Randewich; Compiled by Megan Davies; Editing by DanGrebler, Nick Macfie and David Gregorio)