what would you tell robinhood to do here? >> robinhood got to let them trade. man. i mean, i think the real situation of what's going on is, i don't think the ceo had the money to cover the actual money that was going through the platform you know, the margins. i don't think he had enough to cover the margins. so i think that's what's really what the freezing is about i don't know, but it just looks like, you know, it's playing into the hands of the big wall street guys, the big hedge fund guys that's what it looks like, playing into their hand and kind of siding with those guys instead of what robinhood stands for and letting the little guy trade. >> ja, you know, a lot of people wonder what kind of legal risk robinhood is under, but they do say the terms of service, i understand robinhood may discontinue my account and any services related to my account immediately with written notice. you think anybody actually read that >> people usually don't read the fine print and i'm pretty sure what robinhood did is within the guidelines of what's in that fine print bu

and you're paying for the robinhood or the flow, is that customer getting, is the robinhood gettingngressman i believe that is an excellent question. the execution quality that we can provide as measured in terms of price improvement is, heavily related or coral lated to the size of the order that we receive. so, if i were to speculate -- >> don't tell me that there are other factors involved and take us down another road. i'm asking you a clear question. >> because the robinhood order comes from a community, a community of traders who tend to trade in smaller size. >> that isn't my question, sir. you're evading my question by making up other questions. let me -- liz: there you have it. congressman getting very frustrated because he wanted a specific answer to that question. you know, hillary vaughn earlier played the end of that exchange. we wanted to play the beginning where congressman brad sherman, the chair of investor protect subcommittee, questioned ken griffin, head of hedge fund citadel and sid at that at cital securities. market makers insure a trade between a traders and

robinhood was able to meet our deposit requirements. we were in compliance with capital obligations throughout the period. that is additional capital, the $3.4 billion, was not to service our requirements. it was entirely to prepare for a future, even greater black swan event, and to remove restrictions on the trading and buying of these securities. rep. waters: the gentleman's time has expired. >> thank you, madam chair. this would have been nicer 10 minutes ago when i was supposed to go, i'm going to go back to mr. griffin. the ranking member was filibustering himself. i wanted to make sure, mr. griffin, you had the opportunity to feel comfortable with that explanation of the best execution and what was tried to be asked. mr. griffin: i think it is important to emphasize that we have vigorously advocated for execution quality to be one of the dominant session making factors throughout order flow in the united states. this has saved retail investors billions of dollars over the years, and contrast to the executions they would receive t

robinhood set the standard, robinhood has driven the new business model that all of those brokers adoptedhemselves. robinhood issues were by no means specific either to it or fintechs and disruptors more broadly. caroline: also going to be digging a little bit more into the retail mania next. this is bloomberg. ♪ romaine: today we are focused on fintech and the fallout as it relates to what we have seen with robinhood. new u.s. treasury secretary janet yellen -- remember her, left from the past--blast from the past. joe: everyone is trying to figure out what to do about this crisis of people overpaying, trying to figure out if they broke any laws. regulators meeting with the sec and the new york fed in the first public effort to discuss gamestop. interestingly, and this is part of the conspiracy theories, which were baseless, all the stuff about yellen connected to citadel, connected robinhood, that kind of -- romaine: ah. caroline: we love a conspiracy theory. romaine: i just want to note, is there a way we can connect this to mario draghi? caroline: i'm going to. it is always about ital

robinhood and financial services second but the robinhood slowback could raise a question has regulationeen an overlooked risk and coulso evals tweeting about his ask me anything on reddit talking about wall street bets right now we will get to that in a moment as we watched gamestop collapse today. dig coslow is with us. dick, always good to see you good morning >> good to hear you guys i would love to be in the studio with you maybe some day soon. >> we are looking forward to that day we are watching gme obviously go back to levels that we saw about a week ago the game is not over by any means, should hedge fund regulators be drawing from the past seven days? >> i mean, there are tons. the first which is probably obvious. it should have been for everyone, the music was going to start there sooner or later and always sooner than later so it's no surprise it is falling back down to earth and i feel bad for the people. you see a lot of articles about the guy that made a million bucks in it. i feel bad for the people losing money in the late going. the second thing that has to happen is, t

several of the brokers -- robinhood robinhood's ceo. several of the brokers offer the order flows as a sale to the firm like citadel. however the price that robinhood gets for the order flow is much higher than any other brokers -- any other brokers receives i could go on and tell you we have pulled the s.e.c. filings that robinhood receives 17% per 100 shares stock of traded, and 58% to 100 shares, and i could go on. but question is, why do companies like citadel pay a premium for their order flows of robinhood's users? >> thank you, congresswoman, for that very important question there are several reasons that may be the case. one important one is that our model and formula for payment for order flow works a little bit differently. we actually receive payment for order flow as a percentage of the bid ask spread rather than on a per share basis and we do believe that that's the most optimal way to structure payment for order flow arrangements >> okay. it's not the -- is it not because companies like citadel can make more money off of r

and robinhood routes half of its customer orders to you robinhood promotes buying positions that you are long on and you owned the hedge fund and the clearing broker. what is there to prevent from you taking advantage of that situation and making sure you profit off the confusion and retail investors >> congressman, i'm trying to understand the question. >> let me give it to you again in 2020, citadel violated regulation sho which governs short selling. citadel is now involved in another short selling problem. and robinhood routes half of its customers to you and orders to you. robinhood halts buying on a position that you are long on. and you own the hedge fund and the clearing broker. what is there to prevent from you taking advantage of that situation and making sure you profit off the confusion of retail investors >> so, in no particular order, i just do not understand the reference to us owning a clearly broker we do not own dtcc we do not control dtcc we are not -- we are not party to the discussion, dialogue, or demands between dtcc and robinhood. so i -- i do not understand t

it feels like robinhood is the wild west. >> robinhood's ceo vlad tenev declined an interview with us but in a statement said it was devastated by the death of alex kearns. and since then has hired hundreds more licensed brokers to provide customer support. robinhood also added a feature for customers in his situation to request a callback from the company. though it still does not have a phone number for customers to call. >>> house impeachment managers will continue their case today, accusing former president trump of inciting insurrection. but no matter the evidence, mr. trump is expected to be acquitted. what will that mean for the future of american politics? senior political analyst john dickerson shared his thoughts. >> it should be novel enough that this week will be the first trial for a former president and that he's the first president to be impeached twice. because we're in fresh territory for other reasons. the trial is taking place at the scene of the crime and those who sit in judgment are witnesses and enablers. these circumstances make donald trump's second impeachmen

robinhood. >> it's the conduct. this conduct is reprehensible. >> reporter: william galvin is the chief financial regulator in the of massachusetts and one of robinhood's chief critics. >> it was a very deliberate effort on the part of robinhood to particularly entice younger inexperienced investors. >> yeah, i bet he's investing right now -- >> reporter: he points to the company's marketing claiming it rewards daily usage of the app and encourages frequent trading. >> a new kind of investor is changing things up. >> reporter: even working in virtual confetti in what a recent complaint by galvin's office described as gamefication. >> they call themselves robinhood for a reason. right, robinhood steals from the rich and gives to the poor. is that happening? >> i don't think so. they've not acted in the best interests of their customers. idea that they're caring for the poor, it's simply not true. >> reporter: what happened to alex kearns is a particular worry to gn and am. they found more than 600 examples in his sta

social media companies reddit, trading app robinhood, and retailers investors. in subsequent hearings we'll hear from regulators and other experts recording these events. including disclosures whenever implemented. many americans feel that the system of staff against them no matter what wall street always wins. in this instance many retail investors appear motivated. given the losses that many retailers had as a result of -- there are many whose beliefs that the system is rigged against them has been reinforced. others have noted there are winners and losers in every trade in our financial markets. i know as a financial services committee is to ensure equity in our financial markets. and protections for investors. today we -- we'll talk to the witnesses regarding these events. it will be an opportunity for this committee to get the facts about the role emof the entities of the witnesses represent. now, i recognize the ranking member of the committee, the gentleman from north carolina, mr. mchenry, for five minutes. mr. mchenry: thank you, madam chair. let me jus

it's not just robinhood.ut there are angry at robinhood and you're going to say i'm going to switch to td ameritrade, you're not getting into another situation there and if you want to go on exchange you might be paying higher prices delano, it's like once you let the horse out of the barn you can't get back in. zero-dollar commissions, that's here to stay i would think >> yeah, it is here to stay. and as mentioned, if you're someone who's swing trading or day trading, it's probably useful to know that if you're going against high frequency traders you're probably losing that very incremental gain but again, that's something you have to understand going in. but if you do understand that, you're like my payment order flow is being routed, i understand that i'm getting zero commission because of this, but i'm okay taking that risk. net positive, again, but the low commissions has been good for younger visitors, has been good for people that have been barred -- or felt they were barred out of this industry. but

would robinhood have prohibited its customers -- when robinhood permitted their customers, other brokerages would have just adjusted the narrative -- given robinhood's track record, is it possible the issue is not clearinghouses but the fact you did not manage her own book, or failed to appropriately manage your own margin rules, or failed to manage her own internal risks? mr. tenev: thank you for this question. let me address the margin point because i think this is an important one that has been under discussed. in december when we lowered our margin rates to 2.5%, one of the details i think was missed was other brokerages have tiered rates where wealthier customers pay much lower rates than lower network customers. so you will have someone who has $10,000 paying 10% for margin, whereas someone with $1 million is 2%. so our approach was give everyone a uniform rate so that wealthier customers are not advantaged with lower rates than lower income customers. i think that is a unique approach in our industry. rep. ocasio-cortez: i have to apologize, i have to reclaim my time for questioning.

it appears that most of the trading on robinhood is of these options.ain how all of this option trading is beneficial, and so i think there's a lot of down side here for robinhood today. >> is there upside for investors like you who are looking for fresh ideas to serve the retail investor, perhaps? there clearly is an appetite there not just for gambling, but for participating in the upside for markets and perhaps in the way that the existing platforms are not serving. is that something that you're looking into >> very much so. >> look, i think we heard complaints from the wall street hedge funds and they were crying, complaining and whining that the message board traders on reddit had basically done to them what they'd been doing for years which was engineering a short squeeze. they posted their ideas on reddit and created a movement. individually all of these reddit traders were weak, they were poor, they weren't rich and powerful, but together they were able to create through online organizing they were able to create effectively the largest hedge fu

the invitation to speak about robinhood and the millions of people we serve.lmost eight years ago beju bot found robinhood and we believed then as we do now, that the system should be for everyone and not just a select few. we dreamed of making investing more accessible especially for people without a lot of money. the stock market is a powerful wealth creator, but half of -- >> i would like you to use your limited time to talk to what happened january 28th and your involvement in it. >> certainly >> madam chair madam chair, the witness has the opportunity to give their own testimony. >> excuse me, you are not -- >> you are not recognized, mister -- >> please directly to the question mr. mchenry. yes, of course >> we created robinhood to economically empower all americans by opening financial facts to them. i was born in bulgaria, a country with a financial system that was on the verge of collapse at the age of 5 i emigrated with my family to america in search of a better life i have benefited from all america has to offer, and robinhood's mission to democrati

sonali: a good base of support for robinhood.e other thing i thought was interesting is there is the robinhood side and the reddit side. reddit said they would be monitoring software providers more. they had a data science team looking at more message boards for retail traders. i'm really curious here. you have a big hedge fund client base. how are they looking at this retail crowd? how are they scouring to find for where they should be investing next? howard: look, we all learned -- wall street has always said when you short a stock, you only made a certain amount of money. but you could lose an infinite amount. i just don't think most people thought about what an infinite amount means. that is like when gamestop one from four dollars to $400. they lost 800 million dollars, which is unbelievable. i think learning to watch retail investors, learning to understand retail investors. it may be news to these people, but it is not news. what it goes to show is that they have such power and such excitement. with all do respect, why was

the robinhood community. many people say that robinhood has helped them to pay car loans, reduce student loan debt, meet daily bills, save for the future and we're proud to serve them. you've invited me today to discuss the events of last month and i welcome this opportunity. in late january many brokerage firms saw massive increase in trading activity in a handful of stocks. prices were moving dramatically day-to-day, even hour-to-hour. one specific day, january 28th -- complete unprecedented event. the spike in trading activity and volatility meant that robinhood securities, our clearing broker had to hold the line, post additional firm capital as collateral to support our clearinghouse deposit demands. to put it in perspective on january 28th our daily deposit requirement was 10 times more than on january 25th. as a result robinhood securities along with many other firms imposed temporary trading restrictions on certain securities. which allowed limited buys of these securities the following day. we have s

killed himself largely thanks to robinhood a bug in the robinhood system. he turned on the app and said he owed $730,000 he did not have because of options positions he thought canceled up. he called the helpline. the helpline was not manned as we discussed. he sent several panicked emails. did not receive a response. there was a response saying his positions were covered. by that point, it was too late because he had taken his own life. this is a gentleman who was 20 years old. under illinois law, he was not allowed to buy a beer but he was able to take on $730,000 that he did not have the liquidity to cover. the history of financial regulation is to protect people like alex kearns from the system. field joke goes if you are playing -- and you can't figure out who the fish is a table leave the table because you're probably the fish. i want to cover a little bit of timeline. december 2019, robinhood was assessed two point $9 million for failing to disclose agreements to your customers. six month after that, alex karen's committed suicide. six month after th

robinhood was conflicted and robinhood acted completely in its own self-interest.s negligence, which is one of the theories in this case. it wasn't, you know, a necessary maneuver to protect the customers at all. they lined their own pockets, they protected themselves at the expense of their customers. >> i just want to remind our audience they had to restrict some trades, they weren't able to take one side of the trade because there was no longer an available borrow on some of those shares. that's really important to clarify. there are so many questions to ask. people do not feel good about citadel. >>> lawmakers want answers without a doubt. i want to ask you, people think about these people who went long, the reddit bros that couldn't get on sports games, that's not who the plaintiffs are, tell us who they are, jeff. >> the plaintiffs are school teachers, single moms, kids in college that are worried about their tuition. and, you know, before when you said, you know, it's free so they have to be paid somehow, in fact that's what the sec fined them for. people do

and so while robinhood might tout itself -- robinhood and others might tout themselves as bringing thissedly it is a of the market, we have to think about whether or not their hidden cost to retail dissipation any market, that the retail investors might not be aware of. and that comes again from the payment for order policy we talked about earlier, but it comes to access to fairly complex financial instruments that are now available at the tip of a finger of certain retail investors who may not understand the complexities of the product or the true price or valuation of these products. emily: i also want to talk to you about the potential burden on the individual retail investors who got involved here, and the folks who were rallying the troops. roaring kitty, who has a very popular youtube channel, where he talks in great detail about what he saw as the financial performance and financial future of gamestop, has been sued on behalf of one of the individuals who lost money. do you see any culpability there? is he really liable for something? gina-gail: you know, given what i know so far

how do you think about it in terms of a brokerage like robinhood, meaning is robinhood going to stay as an independent company, can they make it if we have these sort of flash mobs doing this, and what does it say about the model? >> it certainly, as kate and others have pointed out, it's stressed robinhood's model but i think one thing people may not realize, but the risk of a heavy concentration of risks in these stocks, if you look at the end of last woke, these four stocks, i don't know how many stocks there are overall, 4,000, 5,000, but these four stocks made up 7% or 8% of the volume so, and robinhood, the retail investors, trading a lot of it this heavy concentration of risk pushed up the requirements from the clearinghouse, just like kate explained so, one of the things -- you're already reporting that this retail sort of frenzy or movement is affecting other markets like silver, outside the u.s. as well so, you know, that could continue the one point that i would make is that just to get -- and you pointed out, andrew, this settlement i know it's sort of complex for the vie

tell me, what is robinhood innovating on? what is their massive disruption other than price and do you think that these guys, the pr problem they have with their existing customers is going to be something that they're going to be able to get over if they change their business model in a way that actually costs them money as the customer? >> and that's the big issue, right? is robinhood, my space or are they facebook? and is public.com or one of the other players going to wind up being the big winner in the space? what they're innovating on is actually going directly to the customer instead of having the layers of financial institutions, brokerages, research houses, wholesalers, they're enabling the elon musk's of the world or the next grade companies to have a more direct relationship with the customer this generation of investors are used to having a direct conversation and they're getting closer to enabling and facilitating that direct conversation with the companies. and what you're starting to see and whether it was on c

this is not robinhood to be clear here. okay. they are held to a suitability standard at robinhood.sors merely rerequired investment options fit clients objective, time horizon and experiences. i don't know about but i've been asked repeatedly to explain what a short or short squeeze means. another term floated amongst the robinhood now is the naked short. this allows sellers of an asset the ability to sell without borrowing the underlying asset, aka gamestop. the robinhood reddit crowd never owned the stock. what is interesting the sec banned naked short selling in 2018 but somehow whether it is hedge funds or maybe regular guy or gal at home it seems to still be happening in the markets. as for today, gamestop, amc, even silver, still to be target of trading frenzy. silver is actually today's new thing by the way. "wall street journal" as you mentioned at the top of the show reported robinhood raised 2.4 million more from shareholders. at the end of the day they have to pay out these bets to all of these frankly traders that are on their broker websites. hope that made sense. char

meantime, more on robinhood. robinhood's biggest backers are plowing money into the online brokerage. investors have poured $3.4 billion into the firm in a matter of days including $2.4 billion announced today. the cash infusion coming as robinhood grapples with outraged customers, increased scrutiny from washington. for more, we are joined by bloomberg's any maha. $2.4 billion on top of a billion last week. >> it has truly been extraordinary to watch. you so robinhood raise an emergency billion dollars last week. today, additional $2.4 billion from backers. eclipsing all of the money they had raised up to that point, which was around the $3 billion mark already. it goes to show you how wild the past week has been. the reason they had to do this has to do with the collateral they had to post to a central clearinghouse for the industry. amid all of this volatility with gamestop, amc, and other meme stocks, we saw robinhood investors trading and buying these securities, which required the app and company to put up

one people that one person asked why robinhood was called robinhood.ers were able to venture into more wonky territory. but overall the since that we got was that it was a serious event and that they felt they needed to do something about it. whether that was related to the volatility around gamestop is a different question. we did not -- we did not get that exactly in those few days. has trading become gamified because of firms like roma hood -- by robinhood? at the end of the day, hedge funds have the time, the money compared to a retail investor. shortselling was also under the microscope as well, calls for more transparency. it is one of those things that were there was more transparency on a short. much of a difference would that have made? i cannot imagine it would have prevented the gamestop situation from happening. if anything, it could have fueled and more. francine: on one side, a lot of congressmen were angry that he did not do more to flag on the pops investors, and that he shut them out. is he going to do any changes that robinhood? dani:

for those coaching vlad commissioner dan gallagher joined robinhood last year, two of robinhood's topnication team members who just joined robinhood came from one of its regulators one also worked for president obama's treasury department. robinhood has hired reg nal brown, a veteran lawyer who helped prepare mark zuckerberg people are also paying attention to ken griffin he, of course, is the ceo of citadel securities, the market maker that works with robinhood and citadel the hedge fund those relationships will require some scene setting and a lot of explaining to congress analysts i've been talking to expect law makeers to really grill these witnesses, especially the ceos similar to big tech in the past very few expect deeper conversations around market structure. >> realistically is this going to be some political point scoring around protecting the retail investor and big versus little or expect new information about the hedge fund/app relationship to come out of this >> that's the expectation, the first thing about a little bit of grandstanding a note was put out this morning es

killed himself largely thanks to robinhood a bug in the robinhood system. he turned on the app and said he owed $730,000 he did not have because of options positions he thought canceled up. he called the helpline. the helpline was not manned as we discussed. he sent several panicked emails. did not receive a response. there was a response saying his positions were covered. by that point, it was too late because he had taken his own life. this is a gentleman who was 20 years old. under illinois law, he was not allowed to buy a beer but he was able to take on $730,000 that he did not have the liquidity to cover. the history of financial regulation is to protect people like alex kearns from the system. field joke goes if you are playing -- and you can't figure out who the fish is a table leave the table because you're probably the fish. i want to cover a little bit of timeline. december 2019, robinhood was assessed two point $9 million for failing to disclose agreements to your customers. six month after that, alex karen's committed suicide. six month after th

robinhood raised another $2.4

robinhood traders made it to the money. i don't know that we saw as much about the reddit interaction, how wall street bets worked in creating this frenzy but i do also feel like, you know, where is personal responsibility taking out big loans to buy stock because you're on a mission, a kamikaze mission to take down wooelt i don't know i don't think we've learned anything new, really i agree with guy the idea roaring kiddie, robinhood, sit dell, it's theater. >> it's like a joke, rite? like melvin capital, reddit walked into a bar and met a -- in all seriousness, it's an interesting point in terms of striving or wanting to put up guardrails how can you possibly do that people ultimately are responsible for their own actions, aren't they in so many aspects of life family as well >> yeah. i couldn't agree more. what do we need gargoyles less why are we talking about them as if they don't know anything. robinhood is game fight. does that mean they're not know what's going on? i know a lot of professionals who don't know what's

you have seen the target shift from robinhood to the market makers and back to robinhood. it is not just robinhood that does that. it is all these brokerages. it is the way they are able to make a profit even though they have zero feed trading. that all has been legal and fine. obviously it is under a much heavier spotlight now. romaine: katie greifeld, are cross assets reporter. -- our cross assets reporter. coming up, we are going to go from the reddit retail media to the fundamentals. there was a huge rally in the cannabis sector. some of it may be based on fundamentals. this is bloomberg. ♪ romaine: welcome back. today, we are focused on the retail impact of the markets. one thing i thought was interesting is a bid all this retail frenzy and speculation, buried somewhere is a fundamental argument. we saw that with gamestop. we are seeing that to another extent with the rally we have been seeing in cannabis stocks. joe: there has got to be some story that gets people excited so the masses can coalesce around it. the moves are really incredible. we mentioned at tilray ha

but it did underscore system issues and robinhood.st that, they are a broker-dealer, their responsibilities of the broker-dealer from a capital standpoint in a know your customer standpoint and those are the issues they will have to deal with before they turn to go public and i'm not saying they won't go public this year, maybe we get through this in a week and back to the public offering and get their house in order fast but that's where we are right now with robinhood going public it's on hold and on hold for the reasons i laid out. back to you. liz: indeed an important for people to understand the clearinghouse weathered citadel security or whatever, they actually need to process and settle the trades, robinhood does not do that, you can offer the bogeyman. >> i don't think the bogeyman is human error. here's the thing it's not citadel the settles are trades, they have to comply with the tcc, they ramped up the amount of money they had to put in per capital in the middle of last week which meant they either had to get money or they

are making the robinhood. it was about 50% of revenue. there are questions around the efficacy of that, whether citadel securities was going to get full price for a retail trader. the other thing is we learn about the behavior, the majority of orders placed our buy and hold transactions. but there is options trading going on. questions were raised whether the education level of retail investors is high enough where the platform is transparent enough about the risks involved in trading financial securities. annmarie: that brief exchange we saw was with citadel ceo ken griffin and a democratic senator. was he painted as the villain in all of this from lawmakers? >> the robinhood ceo was painted as the villain. ken griffin got a lot of accusations of hedge funds being bullies. one specific he got grilled over was the idea of a tax financial transactions. he argued that would not be in the best interest of pension funds, the average american saver. the attitude from democratic lawmakers is that wall street is on t

. >>> robinhood was supposed to be the vehicle to -- and now the company is facing all sides. kate rooney as more on robinhood's situation, even as we see this capital raise again. >> that's right. robinhood's venture capital ventures stepped up to solve at least one big problem for the start-up -- cash it would announced an additional $2.4 billion on top of a billion they brought in last week, so $3.4 billion for robinhood after restricting trading, robinhood is starting to ease some of those limits on gamestop gamestop at least we just got word they raised the trading limit to 20 shares, up from a single share this morning and last week. still, clients who already own more than 20 shares still can't buy more ceo vlade tenev spoke on the weekend. robinhood said that the capital requirements increased 10x last week, and all piling into the same names, which at least this would, robinhood is battling criticism from lawmakers, and still a lot of blowback from social media even if some are leaving robinhood, it's estimated they added 600,000 new accounts on friday back to you guy

for when robinhood monetizes addiction. you make money from the quantity rather than the quality of trading. much has been said about improvement, and one of the arguments for payment is price improvement. according to the wall street journal, said adele claims to have saved investors $1.3 billion last year. but how could citadel know? it transacts directly with brokers and even if you stipulate that there has been a cost savings, it is unclear to me how much of the cost savings is being passed on to the retail investor, and how much of the cost savings is actually being pocketed by robinhood as profit. we know there is no commission at the front end, but what is the hidden cost of two investors at the back end of the transaction? can you give me clarity about the hidden cost? >> that is a very important question. in 2020, robinhood provided our customers in excess of $1 billion in price improvement. that price improvement is measured relative to the national best bid and best offer which is the reference price for all majo

liz: i see what you did charles, we also have some breaking news robinhood ceo has dropped this he's calling for real-time settlement of trades, we will tell you what he's calling for in just a second but no groundhog day at all in wall street, they may have indicated winter will last six more weeks but the market is sizzling hot look at the nasdaq up 245 points within points of an all-time record close. opposite story for gamestop in the reddit after being halted before noon due to massive volatility but gamestop tables are turning as one of its champions admits to $700,000 in losses and throws blame is the system rig for the hedge funds, we have the former brainiac who says yes because he says he helped design the game and the other big game five days away who will come out on top, tom brady or patrick mahomes play shared that, here on the door buster his app is offering ahead of super bowl sunday and why fox bet is testing the waters on how the stock market might move on any given monday. we have to get you the fox business alert back on and then brought it market but they are bre

to help robinhood.kay let the private exchanges deal with the issues. i don't the federal government mucking around with a lot of crazy class warfare. by the way, stu consider this, i'll ask you this question. is it possible that the stimulus checks have been used to invest in penny stocks? a lot of rumors about that. i've heard it from my pals on wall street that is not what was attended, i mean, it is a free country you want to buy a penny stock do you do we want really more stimulus to go into more penny stocks. i have my guess but i'm not sure qhat problem is here. it may be, it may be -- a solution in search of the problem as far as the government goes. >> it could be a new factor which is the organized retail investor with a phone and access to social media. organizing coordinating and attack if you like on maybe the promotion of something. that this may be a new factor in the market. i don't think it is going away larry. >> well look, you know, i welcome more and more people owning shares. i mean

robinhood was able to meet our deposit --robinhood was able to meet our deposit requirements. we confirm with our capital requirements throughout the period, and that $3.4 billion is not to serve as [indiscernible] it was to prepare for a future even greater black swan event and to un-restrict and remove restrictions on the trading and buying of these securities. chairwoman water: the gentlemen's time has expired. [indiscernible] >> thank you, madam chair. this would have been nicer 10 minutes ago when i was supposed to go, but i will go back to mr. griffin and the capital markets subcommittee. i think ranking was filibustering himself and i want to make sure that mr. griffin that you had that opportunity to feel comfortable with the explanation of that best execution and what was attempted apparently to try to be asked. mr. griffin: congressman, i hope so. i hope it is -- i think it is important to emphasize we have vigorously advocated for execution quality to be one of the dominant decision-making factors for order flow in the united states. this has saved retail investors

a problem with facebook, twitter , and robinhood. we will see that conversation evolved towards there. host: isn't what we are seeing a bubble? how long can it last? who pays the price when it worse -- when it bursts? >> people want to make a quick buck. people have put their money in anticipating there will be a very big correction coming. and yet, there is a collective rush of excitement. feels like a carnival. how long can it drive this train at full speed before it comes off the tracks? i don't think people are going into this with a degree of naivety. this is an expression of an internet community which is a bit nihilistic. it is a way of expressing your disdain and contempt rather than necessarily wanting a positive, individual outcome for yourself. one of the consequences after will be a huge correction and people will lose money and they will take away that feeling of having been the trade by apps like robinhood and there will be a push, a movement towards decentralized finance. you already have people saying -- i made my fir

the key thing for robinhood investors is we all know investing is caveat, what is robinhood have support for the new entrants enter the market? do they have the skills and communication on their platform to educate customers? i have been in this for four decades. monitoring accounts on the margin, use of options, small dollar stocks are all fundamental to retail investment brokerage. his dad being adequately handled on an app based platform like robinhood? tom: brilliantly said. what i think is so important is the strange phrase, due diligence. in the old days, there was a respect for it. technology took over. how do you do due diligence with technology? lisa: congressman hill is talking about attitude which is part of what the robinhood crowd is rebelling against. the balance, how do you ensure you give people access to this explosion in asset prices? while giving them the correct due diligence? that is complicated. rep. hill: i asked him yesterday, does he have a call center? the average robinhood investor does not have someone to call during the business day, it is all done by email t

tom: the heart of the matter is robinhood is robinhood. with silver, you're playing around with very, very experienced, entrenched entities, aren't you? marty: you are indeed, and one of them including citadel, which is reported to be one of the top holders of the contracts that underlie the silver price. and there are very different mechanics to the silver etf than there are for basically gamestop and other securities. and the end of the line, taking possession of this physical commodity may be in-store, as well, so it's a very different market. the institutions are net long. meaning they hold. they're not shorting the metal. how this all ends is likely to be badly for the retail investors. tom: it'll likely end badly for them, and is likely short-term. by the way, i thought bloomberg's reporting was really smart. was there any indication of people walking away from the short squeeze? i don't see it. marty: we don't see any indication of that so far. like everyone else, we're watching the numbers and making determinations based on the pri

you don't have that at robinhood. the big scrutiny on this lat form is how do they make their money in the citadel situation, do you have any problem with that >> yeah, actually, it's almost like a lay-up for me, kevin. i spentthe better part of the '90s focusing on best execution. agency only trading. sinister in my mind and always told people who wanted to trade semiprofessionally should have direct market access it was like the anti-payment, but over the decades and with talking now about not a handful of traders professionally but for millions of people who use robinhood and then robinhood makes that money by sending it to a market maker which results in a sort of free commission which is the market and make their money behind the scenes, i think there's a place for those electronic market makers that actually enable, not necessarily just robinhood but all those broker dealers that cater to retail to actually have, be able to help somebody buy 50 shares or a fraction of a stock it's not about paying versus direct

my money is held hostage to robinhood. get it out >> reporter: robinhood declined to comment rayl said they have since resolved the issues with his account in particular. these are obviously just a few examples of robinhood's 13 million customers but they do echo conversations we've had with other users and complaints made through the ftc in recent weeks. this started with robinhood limiting the buy they said they did that because of requirements from their clearing house and say it was not for the benefit of hedge funds that had gotten squeezed robinhood clients have filed more than two dozen lawsuits seeking damages. for now rayl says he is moving his money into cash. he doesn't trust wall street, robinhood or the other brokerage firms. back to you. >> everyone is trying to make sense of the u.s. personal savings rate and robinhood downloads. today it's b of a. the chart is titled stuck at home with just sof cash and free trades others argue a correlation is not causation. do you think this makes sense trying to pair the

well, when people sign up on robinhood, they don't know that

now, some of robinhood's clients ar saying show me the money kate rooney spoke to one. >> robinhood, robbing people>> of millions of americans >> reporter: 43-year-old rays rael is on of millions of americans using the free stop trading app robinhood. he says he lost $50,000 of nokia shares he claimed he was locked out of his account and couldn't get in touch with anyone at the company so he drove 2400 miles from indiana to robinhood's california headquarters to protest. >> i had money in my account here at robinhood that i need for living expenses, bill money, grocery money, family money. so my money is currently held hostage to robinhood i can't get it out. >> reporter: other angry robinhood customers have been showing up to the start up's headquarters in recent weeks banging on the door and claiming they, too, are unable to get anyone to respond to account issues >> i have $2 million take my information, my account number in one case a man threw a t-shirt at a security guard's face another vandalized a sculpture and the most extreme example someone allegedly threw dog feces at the

liz: he also said it's a dirty way of making money on behalf of robinhood, robinhood, of course, hashe's elitist, and he's ignoring a whole culture shift in all of this. jaime, how do you view robinhood and what it has done for a retail investor out there? >> i mean, to me, that quote sounds like somebody who's afraid of this change that's coming of. but i'd also point out the fact that right now these retail traders are all making a lot of money with gamestop and a whole lot of other stocks. obviously, some people lose money and make money, that's always been the case with the stock market. but i'm sure if you asked those retail traders how they feel about the fact that they're getting free trades overall not just on robinhood, robinhood pushed all brokers or a lot of brokers to also give free trading, and if you ask those retail traders what they think about participation in the market, i'm sure they'll have a different opinion of it. liz: dow jones industrials just hit a session low and, needless to say, gamestop's moving in the complete opposite direction, up $47 or a 51% gain. w

initially, robinhood said and today also, robinhood said that the trading settlement times -- is thatn a way, that would've made it easier for robinhood. but on the other hand, you hear ken griffin, ceo of one of the largest hedge funds in the world saying that kind of invasion in financial markets is not really something the market is ready for. there are things about the market that robinhood was asking for that you heard a major investor say was not possible and there could be other risks embedded in doing such a thing. haslinda: robinhood really was at the center of this. what were the main issues? >> the idea of having enough capital on hand was really one of the biggest issues for investors everywhere. robinhood, if it was not able to make those capital calls, if they did not raise that $3 billion, a bloomberg columnist made the argument that this could have become a much broader market systemic issue. the market was not that far from a major accident because of a robinhood's place in the market and these capital requirements. that didn't feature highly today. it was a big conce

robinhood is trying to hurt the little guy. they're not trying to hurt the regular guy. there's 17 million people. but the problem is there are other alternatives and i think that the idea that you are so-called stuck at robinhood, 40%. a huge percentage of the money that left robbenhood went to square, so i think that you have to recognize that while everybody is concerned about robinhood, be concerned about robinhood, it is really being concerned about systemic, not systemic risk, but regulatory risk, and regulatory risk is not as important carl, for the reason why i'm making this perspective is when i see stocks like facebook, which david mentioned, or i see some of the stocks that are trading on a matter of revenue like service now, is reporting a really good quarter or even a paypal, you go into a square, it's very hard to refute the fact that maybe these are the new way, new banks, so you have the tesla combination, i want to find the next tesla, you have the chewy combination, which is obviously doubled the market of gam

the ceos of robinhood, reddit. this stock is about to see accelerating gains we'll tell you what it is and lay out her case >>> don't forget, we have a special bonus hour coming up at 6:00 p.m "fast money" is looking for investments and how america changes doing business >>> countdown for walmart. the leading retail fallen more than 4% from recent highs. have we seen a recent rating for the stock? where are we in that process is it over, maybe, guy, especially with the reopening on tap? >> i don't think it's over i have to point out both tim and karen have talked about this, and i'm on board now in terms of the rerating you want to compare it to costco costco is trading close to 33 times. sam's club lives within walmart and walmart at 20 times to me sounds cheap also you're talking about a company that's probably going to have close to 10% eps growth year after year, and they're operating at markets seemingly to improve i think we're looking at 4.4%. i don't see why walmart shouldn't trade higher than 25, probably

. >> coming up, robinhood heads to d.c. and the ceo is set to testify in front of congress about the reddit fueled mania. and we will talk to members of congress about some of the questions they plan to ask. >>> and apple is taking the fight across the pond. >>> and tesla may be adding to the fight and bringing bitcoin to their business. mii mar talk to the yoof amabout the fight ahead. >>> this is "the exchange" on cnbc. they said it couldn't be done... but you managed to pack a record 1.1 trillion transistors into this chip. whoo! yeah! oh, hi. i invested in invesco qqq. a fund that invests in the innovators of the nasdaq 100, like you. you don't have to be circuit design engineer to help push progress forward. can i hold the chip? become an agent of innovation with invesco qqq. ♪♪ when you've got a business, you don't want to worry bec about slow internet orion confusing cybersecurity. so get comcast business internet with fast, reliable speeds, and add the advanced security of comcast business securityedge. it combines