REUTERS: The YouTube streamer known as Roaring Kitty, who helped drive a surge of interest in GameStop Corp, will testify before a U.S. House panel on Thursday alongside top hedge fund managers.
The House Financial Services Committee is examining how a flood of retail trading drove GameStop and other shares to extreme highs, squeezing hedge funds like Melvin Capital that had bet against it.
The witness list was announced on Friday by Representative Maxine Waters and includes Keith Gill, who also goes by Roaring Kitty, Robinhood Chief Executive Vlad Tenev, Citadel CEO Kenneth Griffin, Melvin CEO Gabriel Plotkin and Reddit CEO Steve Huffman.
The virtual hearing, entitled “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide,” will take place on Thursday at 12 p.m. ET (1700 GMT), according to the press release and will be livestreamed https://financialservices.house.gov/live. Waters, a Democrat, is chair of the House Committee on Financial Services.
“We are working with the House Financial Services Committee and plan to testify,” Reddit’s Huffman said in a statement. A spokesperson for Melvin confirmed that Plotkin plans to testify.
Representatives for Citadel and Robinhood did not respond to requests for comment. Gill could not be reached for comment.
Robinhood, Reddit, Melvin and Citadel have been at the center of the GameStop saga, which saw retail traders promote GameStop on the Reddit forum WallStreetBets. Robinhood emerged as a popular venue to trade the stocks but was criticized for temporarily restricting trading in the hot stock.
The GameStop surge resulted in massive losses for Melvin, after the hedge fund bet the retailer’s stock price would tumble. Citadel’s hedge funds, along with founder Griffin and firm partners, put US$2 billion into Melvin.
Democrats and Republicans are united in their outrage by Robinhood’s decision to suspend trading in the so-called “meme stocks” on Jan. 28. Tenev said the company had to impose the restrictions after wild trading in the stocks triggered a US$3 billion margin call by Robinhood’s clearing house, straining the company’s balance sheet.
Massachusetts securities regulators have also issued a subpoena seeking Gill’s testimony.
(Reporting by Michelle Price in Washington and Megan Davies in New York, additional reporting by Svea Herbst-Bayliss in Boston and John McCrank in New York; Editing by Daniel Wallis and Lisa Shumaker)