Press Releases

 A transcript of the interview is copied below. 

Tom Keene: We saw that yesterday at the GameStop hearings. I noticed the Washington Post this morning gives it essentially zero play. What happens next after that testimony? 

Rep. Hill: Well first, I think Mr. Tenev, the CEO of Robinhood Markets, certainly apologized for the fact that they had inadequate collateral on deposit with their clearing firms and, DTCC, the depository trust, which then put their customers in a bad position in the midst of a bubble. That was a key element. In terms of the equity market plumbing, I thought the hearing demonstrated it worked as we expected it to, but I think Maxine Waters, our chairman of House Financial Services, is going to have additional capital markets hearings. And from the discussion yesterday, I think she will focus on payment for order flow, also reassess short selling, what have been the changes since the 2010 changes. 

Lisa Abramowicz: Congressman, how concerned are you about the broader environment that has led to this type of speculation, both the fact that people have money as well as the apparent lack of risk prompted by the Federal Reserve? 

Rep. Hill: Well, let's start with that. With zero interest rates, and the Federal Reserve's accommodative policy, household savings at the highest rate in decades. This prompts people to reach out and take risks, just as you have been discussing the last few minutes. But the key thing for Robinhood investors is we all know investing is caveat emptor, but does Robinhood have the support for new entrants to the investing market? Do they have the skills and communication on their platform to educate customers? I have been in this business for four decades, and the paternalistic aspect of coaching, monitoring accounts on margin, on the use of options, on small dollar stocks are all fundamental to retail investment brokerage. Is that really being adequately handled on an app-based platform like Robinhood? That was a key thing we talked about yesterday. 

Tom: Brilliantly said from the gentleman from the Delta Bank and Trust Company. Lisa, what I think is so important here is this strange phrase, "due diligence." In the old days, there was a respect for it, and then to be honest technology took over. How do you do due diligence given modern technology? 

Lisa: Well, that's exactly what Congressman Hill is talking about, this paternalistic attitude which is actually part of what the Robinhood crowd is rebelling against. That balance, how do you ensure that you give people access to this dynamism, to this explosion in asset prices that have been fueled by the environment you're talking about while giving them the correct due diligence? That's complicated. 

Rep. Hill: Well, I think [Mr. Tenev] should enhance his website. I asked him yesterday, does he have a call center? The average Robinhood investor does not have someone to call during the business day. It's all done by email to their account. That's inadequate in tough times. The call centers at Robinhood apparently are only granted to those with extreme option approval by the firm, and I believe the CEO committed yesterday to much better consumer communication and he made a comment about consumer education on his platform. Look, we all know granting someone margin, granting someone option authority is a tough job just to do by an algorithm based on the boxes checked by a customer.