Robinhood grilled on GameStop saga

We watched the hours-long GameStop/Robinhood hearing, so you didn't have to. ?? Some highlights (beyond just Keith Gill's quote "I'm not a cat" ...): - Democratic Rep. Brad Sherman of California questioned the system of payment for order flow as a means for hiding the true costs of trading to retail investors. - Reddit CEO Steve Huffman said financial advice on Reddit is better than what you see on TV, because Reddit posts have to be endorsed by “thousands” of people before they gain widespread visibility. - Gabriel Plotkin, founder of Melvin Capital, said the investment management industry will respond to the GameStop saga by paying much closer attention to message boards like Reddit’s WallStreetBets. What were everyone else's top takeaways? The hearing didn't exactly go as I thought it would, so I'm curious on others' thoughts. https://lnkd.in/dFY-65h #robinhood #gamestop #reddit #roaringkitty

We wrap up Week 1 of Protocol|Fintech with our Friday newsletter focused on reactions to the Robinhood grilling in Washington DC and other news from the fintech world. Sign up to get our newsletter which comes out Tuesdays and Fridays! https://lnkd.in/garXpPs

What went wrong with Robinhood is not so much about what happened during this "crisis" as what they did wrong before. They ran too lean, on a shoe-string, didn't have sufficient internal operational skills, didn't carry enough regulatory capital, and didn't have (in particular) risk-management capabilities that would have been needed to foresee the build-up of concentration risk in their customers' accounts, which would have lead to forecasting the likely need for additional capital, raising it, and having it ahead of time so as not to have to stop trading. Once the capital deficiency happened it was too late and they had to do what the clearing depository required - post more capital (which they didn't have) or stop adding to risk in certain names. #Robinhood #GME #GameStop

At @CNBC today we're glued to the House Financial Services Committee hearing on RobinHood trading of GameStop - check out our interview about that hearing #trading #financialservices #interview #fintech with David O. Sacks, an investor in over 100 companies, including Reddit, and part of the "PayPal Mafia," as its early COO.

This morning on CNBC with #SquawkAlley, we talked about democratization and why I think you can't have it without full transparency so every retail trader knows exactly where each penny is going. We know the house always wins, let's start by knowing who's the house. Thanks for having me Brandon Gomez, Julia Boorstin & Jon Fortt. #robinhoodapp #Robinhoodhearing #reddit #retailinvestment

Been watching with interest the House Financial Services Committee hearing with Robinhood CEO Vlad Tenev getting grilled about trading in GameStop. Makes me think about all the other shenanigans going on in the markets over the past few decades that Congress completely ignored. What would you like to see Congress investigate?

Incredible how payment for order flow is becoming a mainstream issue. If you struggle to understand the relationship between Robinhood and Citadel Securities -- it's part of a $3 billion business across Wall Street. See below.