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Sen. Elizabeth Warren asks Robinhood to explain why it restricted GameStop trades after hedge funds’ losses

  • Sen. Elizabeth Warren asked stock-trading company Robinhood in a letter to explain why it restricted trading in red-hot shares of GameStop after hedge funds suffered huge losses in a short squeeze.
  • Warren noted that Robinhood last week abruptly changed trading rules for individual investors in certain stocks on its no-fee platform, while hedge funds and Wall Street institutional investors were allowed to keep trading in GameStop and the other companies.
  • The letter asks Robinhood to disclose what led it to impose tight trading restrictions on GameStop and other stocks, and whether its hedge-fund investors or other financial services partners who had big stakes in such trading affected the app company's decision.

Democratic presidential candidate Sen. Elizabeth Warren (D-MA) speaks during a town hall event at Weeks Middle School on January 19, 2020 in Des Moines, Iowa.Spencer Platt | Getty Images

Sen. Elizabeth Warren on Tuesday asked Robinhood in a letter to explain why it restricted trading in red-hot shares of GameStop after hedge funds suffered huge losses in a short squeeze.

Warren, D-Mass., noted that the online brokerage last week abruptly changed trading rules for individual investors in certain stocks on its no-fee platform, while hedge funds and Wall Street institutional investors were allowed to keep trading in GameStop, Koss, AMC Entertainment, Express, Naked Brand Group and other companies.

"Robinhood has a responsibility to treat its investors honestly and fairly, and provide them with access to the market under a transparent and consistent set of rules," Warren wrote in her letter to Robinhood CEO Vladimir Tenev.

"It is deeply troubling that the company may not be doing so," wrote Warren, who is a member of the Senate Banking Committee.

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