Houston lawmaker wants hedge fund to answer to GameStop controversy

HOUSTON, Texas (KTRK) -- In the wake of the controversy after the rapid rise in value of GameStop's shares, Rep. Al Green, D-Houston, says he intends to take on a system that allowed a hedge fund to halt trading of the stock through the Robinhood mobile app.

On Monday, Green, who is the chairman of the House Financial Services Subcommittee on Oversight and Investigations, said he hopes an upcoming hearing on GameStop will help dispel fear of a rigged stock market system that benefits wealthier institutions over ordinary "retail" traders.

"We have a circumstance now where the integrity of our stock market is being challenged," Green said during a news conference from his Houston congressional office. "We have to get to the bottom of it because people don't want to believe that the market system is rigged. They want to believe that they have a fair and equal opportunity to invest and have reasonable outcomes based upon market conditions the same as any other investor."

According to Green's office, the House Financial Services Committee will host a hearing to "examine the market in general and how it has been manipulated by hedge funds and their financial partners to benefit themselves while others pay the price." Green is prepared to participate and bring questions at this hearing to uncover how Robinhood may have undermined retail investors as well as possible undue influence from hedge funds.

SEE MORE: Robinhood limits trades of GameStop, other companies amid market volatility

Green's remarks on Monday address specifically hedge fund Citadel, which is at the center of its dealings with the GameStop stock and the Robinhood trading app. According to Green, Citadel is accused of influencing Robinhood to halt sharing of the GameStop stock after its value skyrocketed due to a rally of smaller investors buying shares.

GameStop, as Green described, was trading at a very low price that Citadel was betting on the stock tanking even lower, resulting in potential rewards for the hedge fund.

The trading of GameStop has caused a ripple effect across Wall Street, with everything from dying companies like AMC and commodities like silver skyrocketing in value.

SEE MORE: The strange but true reason why GameStop's stock keeps surging

In Congress, both sides of the aisle want Robinhood and Citadel to answer to the fact retail traders were kept from trading GameStop stock.



As of Monday, the House committee hearing has not yet been scheduled.
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