Robinhood CEO Vlad Tenev apologized at a House hearing Thursday for the confusion that resulted from his platform's decision to restrict trading of certain "meme stocks," while admitting he did not handle the situation perfectly.
Why it matters: The wild stretch of Reddit-fueled trading last month has resulted in intense scrutiny of the power of platforms like Robinhood, short-selling hedge funds and the stock market's plumbing.
Catch up quick: In the midst of the mania and historic trading volume, Robinhood cut off customers' ability to buy, but not sell, a group of "meme stocks" that included GameStop, AMC and others promoted by Reddit users. The move caused an uproar from customers and lawmakers.
- Tenev later explained that they did so because of the explosion in the amount of cash clearinghouses required Robinhood to post.
What they're saying: "The $3.4 billion that we raised, I think goes a long way to pushing into the firm from future market volatility and other similar Black Swan events," Tenev said.
- Earlier in the hearing, Tenev stood by previous comments that the company did not have liquidity problems, which some have speculated led to the decision to halt stock market trading.
What to watch: Thursday's hearing will be the first of several, with others likely to focus on "recent market volatility involving GameStop and other stocks," according to Rep. Maxine Waters (D, Calif.), who chairs the committee.
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