Business Maverick: Robinhood, Citadel Reject Conspiracies They Halted ‘Meme’ Trades

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Robinhood Markets and Citadel, central players in the GameStop Corp. saga that gripped markets last month, are using congressional testimony to push back against conspiracy theories circulating in Washington that they coordinated to restrict retail investors from adding to their bets.

to scrutinize all players tied to the tumult to assess whether new rules are needed to curtail the influence of hedge funds and to strengthen guardrails for smaller investors.

“Melvin Capital played absolutely no role” in the decisions of trading platforms to limit the buying and selling of GameStop shares, according to Plotkin’s written testimony. “In fact, Melvin closed out all of its positions in GameStop days before platforms put those limitations in place.”Plotkin used his testimony to clarify that Melvin Capital wasn’t “bailed out” by the $2.75 billion it received from Citadel, Point72 Asset Management and others last month.

Keith Gill, a Reddit user known as “Roaring Kitty” who is credited with inspiring GameStop’s rally, will testify that he was merely an individual investor using public information to study companies. Gill, one of the most influential participants pushing GameStop on the WallStreetBets Reddit forum,this week in Massachusetts for misrepresenting himself as an amateur investor and profiting by artificially inflating the price of the stock.

In his testimony, Tenev described the morning of Jan. 28, when the brokerage halted purchases of GameStop and other “meme stocks.” At 5:11 a.m., the industry’s clearinghouse — a body that manages system-wide risk — demanded a deposit of more than $1 billion from Robinhood, he said. Because the sum demanded was even larger than the amount of net capital the online brokerage had on hand, an additional charge of $2.2 billion was slapped on top, bringing the total amount due to about $3 billion.

 

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