New York Attorney General Letitia James (D) in a statement Thursday said her office was “reviewing” trading on the Robinhood app relating to GameStop stock.
“We are aware of concerns raised regarding activity on the Robinhood app, including trading related to the GameStop stock,” James said. “We are reviewing this matter.”
The stock trading app announced Thursday it would block the purchase of stocks made popular on Reddit, including BlackBerry, AMC and GameStop. Users of the r/WallStreetBets subreddit began collaborating to drive up the price of the stocks to counter short-selling by hedge funds. A class-action lawsuit was filed against Robinhood shortly after.
The move drew criticism from both Democrats and Republicans who said it represented a different standard for independent traders as compared to established hedge funds.
“People on Wall Street only care about the rules when they’re the ones getting hurt. American workers have known for years the Wall Street system is broken – they’ve been paying the price,” incoming Senate Banking Committee Chairman Sherrod Brown (D-Ohio) said in a statement. “It’s time for the SEC and Congress to make the economy work for everyone, not just Wall Street.”
“We now need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit,” tweeted Rep. Alexandria Ocasio-Cortez (D-N.Y.).
Sen. Pat Toomey (R-Pa.) called Robinhood’s move “disturbing,” tweeting “retail investors should be free to purchase even highly-speculative stocks, just as hedge funds should be free to short them.”