Ever since the suspension of the GameStop trading, the Robinhood platform has been facing a lot of heat from the cryptocurrency as well as regulatory authorities. It was just two weeks back when the Reddit Army had triggered the stock prices for GameStop to go sky-rocket by rallying on it.
However, Robinhood did something that triggered a lot of anger in the cryptocurrency and common investor community. It was reported that the GameStop stocks were suspended for the majority of the investors while they were open for trade for investment/trading giants.
Following the incident, the Robinhood CEO is set to appear before Congress for a hearing on February 19, 2021. It is being reported that the CEO of Robinhood, Vlad Tenev is going to face a lot of heat from the lawmakers from the United States.
During the session at the Congress, the Robinhood CEO will be questioned by the Congress around the suspension of the stock trading. It is being reported that Vlad Tenev has already prepared his remarks and answers around the stock suspension activity.
According to sources, Tenev held the Securities and Exchange Commission of the United States responsible for the suspension of stocks. Tenev stated that the reason they suspended the trading of the stocks was because of the regulatory deposit requirements. These regulatory deposit requirements were put in place by the Securities and Exchange Commission of the United States.
The Robinhood CEO also criticized the particular rule from the Securities and Exchange Commission regarding equity transactions. As per the rule, the equity transaction requires a minimum of two days to be cleared.
While criticizing the rule, Tenev demanded the SEC to introduce amendments to it. He stated that at present, the clearinghouse takes several days to be cleared for transactions. Therefore, the SEC needs to allow the clearinghouse for the transactions to be real-time, instead of it taking two days to be settled.
He also added that he cannot understand why the greatest financial trading institute in the entire world cannot allow the transactions to be cleared on a real-time basis instead of a minimum of two days.
The Securities and Exchange Commission would be doing such a huge favor for the trading sector in the country by making necessary adjustments. If the SEC does it, then it would filter all the risks that are currently being posed by onto the trading industry in the country.
It was back on February 2, 2021, when the Robinhood platform was seen criticizing the two-day settlement.
On top of that, the Robinhood CEO also referenced an investor alert that was issued by the SEC back on January 28, 2021. According to the investor alert, the brokers have the right to reject or limit the number of transactions triggered by the customers.