To talk to you today, a very lengthy hearing yesterday, what was your takeaway um you’ve called this a fact finding mission what’s the one nugget that you pull away, you think from uh the hearing that could lead to potentially additional questions or regulation. Well, i think uh. I think this is a bullet point to a larger value. This is uh. This is a story and a larger narrative and the larger narrative is that retail investors uh so called non sophisticated investors uh under our securities law. They want more and better access to our markets, they want more investment opportunities, they want more sophisticated investment opportunities and they’ve been locked out of it. So so this is but a bullet point in a larger story. In a larger narrative about about fees being crashed through competition and about retail investors wanting greater access to more products and congressman i mean i, i guess you know there were criticisms. Even during the hearing of political theater on both sides uh, it was interesting. The start that we got when robin hood, ceo, vlad tenef, was talking during his opening statement. You had to kind of jump in there to stiff arm uh chair waters to kind of protect his testimony, and she was kind of interrupting with questions of her own. What did you make of just the overall flow of this thing, and maybe the grade that you would have given it in terms of getting into the details? I would give it uh uh less than a passing grade as far as getting into the details, uh look when you’re in the majority, not to quote hamilton the musical, but you get to choose the menu, the venue, the seating right and so the chair of the Committee gets to determine when we meet uh for how long we meet and who’s on the panel and as a republican as being in the minority.
I get to have one witness on the panel, so i try to get a witness who could answer the fullness of what’s happening in the marketplace. Uh the rest of the folks on the panel get to a piece of the story. The reddit ceo got a couple of questions, but frankly is secondary. Uh you’re talking about asking the ceo of a company about stuff posted on one section of reddit when they have millions of users um. So so i i don’t think the setup was right and i don’t think the the panelists were correct and i think it was about grabbing a headline rather than finding facts. The reason why i called the hearing and called for the hearing was so that we could get to the heart of what happened here and whether or not laws were adhered to and whether or not we need to change laws to open up additional access or what’s. Really happening in the marketplace, what do you see is the answer to that latter. Point that you just made about whether changes are necessary and, if so, what’s the next step. Well, i think uh. First of all, we need to ensure there’s that there’s disclosure around payment for order flow. There is uh that laws are adhered to, uh in this transaction. That appears to be the case and we’re going to continue to dig through that, and so my clear takeaway is that to re, regulate or to enhance regulation or to layer on more regulation or to lock retail investors out is the wrong approach.
New taxes, financial transaction taxes – one of my democrat colleagues called for in the hearing, is not the right approach. Uh taxing people for their investment opportunities or taxing people for saving is, is not smart for our economy and for for long term saving um. So so we know there’s some bad ideas. I i think we have to look more deeply at what’s happening here. What what is happening is we have individuals that uh that paid off student debt? We have folks that lost money, but we also have people. That said, you know the hell with it we’re just going to invest. We don’t care. If we’re going to get into this trade, we don’t care. If we make money or lose money, we just want to put the screws uh against a rigged system and so they’re speaking to the larger narrative piece that i i mentioned, that they want more access to equity and and that’s. Why i raised with the the ceo of robin hood uh, whether or not they would offer equity to the users of their app if they seek to go public, will they do that? The fact is that that regulation out of washington prevents that from happening, the uber driver should have been able to have an ownership stake. They’Re the ones that made uber successful the robin hood user is the one who’s made robin hood the company successful. So we need to make sure that we can open up equity ownership in our society much more broadly than it currently is yeah, and it was, i mean, it’s a complicated slate of issues you guys were getting into so i mean just to be fair.
There was a lot of moving pieces and you had five hours, so maybe you know it could have been divvied up. I hear what you’re saying on that front uh when it comes to maybe the issues on robin hood specifically because of course, payment for order flow is something all the brokers get into. But robinhood was the only one on the panel to talk about it. Um and i really enjoyed the line of questioning that came from representative anthony gonzalez, who got into the details about what happened specifically when they had to raise the three billion to kind of cover the liquidity issues here. So i wouldn’t necessarily let them off the hook right away. So what do you want to learn more about what happened there, because, obviously we saw gamestop stock. We were talking about it. On monday, we saw the trading issues come in later in the week. So what more do you want to learn about? Maybe what happened on a minute by minute basis that could be uh potentially problematic in locking out retail investors. Well, i think that that is a very good point. There there is uh. There is some detail here that we need to drive towards uh and uh representative gonzalez from ohio uh. I think asked a really sharp question, which was getting into the nature of whether or not robin hood was equipped to provide the access that they claimed, that they were providing uh to their users and why they lock, customers out and so they’re.
Raising three billion dollars tells me that they needed additional liquidity, that’s kind of obvious right, that’s, an obvious statement to the marketplace, but we need to make sure that these ins, these institutions, were properly regulated for the value at risk, properly regulated for what could be a Very turbulent marketplace hour to hour minute, to minute day to day and so um. We need to get uh more deeply into the heart of of those issues of proper funding and the liquidity practices of uh, of of broker dealers and, specifically, new broker dealers. All right appreciate you coming back on here to channel about that. Obviously this is an ongoing story, so love having you back, we’ll have to have you back yet again, as this goes on for representative ranking member of the house financial services committee representative, patrick mchenry.