As the GameStop stock surge shakes up Wall Street, the White House has continued to remain mum on the controversy, even after the Robinhood trading shut out its users from buying up securities that were sabotaging hedge funds.
During a press conference on Friday morning, White House press secretary Jen Psaki once again avoided questions from reporters on the controversy and said the Security and Exchanges Commission (SEC) is “monitoring the situation.
“They are closely monitoring this situation but it is under their purview at this point of time,” Psaki said.
“Beyond just monitoring it, has [Biden] had any conversations with economic officials about what’s going on?” the reporter asked.
“He’s briefed by his economic team frequently,” Psaki said. “But I don’t have anything more to read out for you.”
As reported by Fox News, “President Biden met on Friday with Treasury Secretary Janet Yellen this afternoon, but Psaki declined to say whether the two would discuss GameStop.”
“Yellen received around $810,000 in speaking fees from the hedge fund that bailed out one of the primary losers in the recent Gamestop frenzy,” the report added.
As The Daily Wire reported on Thursday, the free stock trading app Robinhood halted all trading on GameStop (GME), which rose nearly 900% in just five days after the Reddit board WallStreetBets intentionally drove up the company’s stock price as a financial hit against hedge fund managers engaged in short selling:
The GameStop stock surge was orchestrated by Redditors looking to send a message to Wall Street hedge fund managers engaging in short selling. “GameStop started in January valued at $17.25 and had been heavily ‘shorted,’ meaning many Wall Street hedge-fund short-sellers expected the firm to collapse and the value to plunge with it,” Daily Wire noted.
So far, the Redditors are succeeding, according to CNBC. “Hedge fund Melvin Capital closed out its short position in GameStop on Tuesday after taking huge losses as a target of the army of retail investors. Citadel and Point72 have infused close to $3 billion into [Melvin Capital] to shore up its finances.”
Trading services and government regulators, though, have been vocal over their concern for “market volatility” related to the stock surge, and Wall Street’s hedge fund bankers seem to be panicking, based on social media posts decrying Robinhood’s democratization of the stock-trading process.
On Friday, Robinhood opened GME and other stocks to limited trading.
Speaking with CNBC on Thursday, Robinhood CEO Vlad Tenev said that the GameStop stock freeze was not “at the direction of any market maker or hedge fund or anyone we route to or other market participants.”
“We had to make a very difficult decision. It’s been a challenging day,” said Tenev. “We made the decision in the morning to limit the buying of about 13 securities on our platform. So to be clear, customers could still sell those securities if they had positions in them, and they could also trade in the thousands of other securities on our platform. So it was a difficult decision, and that’s what we had to do as part of normal operations.”