Lawmakers grilled Robinhood CEO Vlad Tenev for more than five hours Thursday over the online brokerage firm’s role in frenzied buying last month of GameStop shares and other beaten down stocks. Although Tenev apologized for his company’s decision to restrict trading in the video game retailer and other high-flying shares, he also defended its business model as one that benefits average investors. Tenev was joined by two hedge fund managers, Citadel CEO Kenneth Griffin and Melvin Capital CEO Gabriel Plotkin, as well as Reddit CEO Steve Huffman, Reddit investor Keith Gill and the Cato Institute’s Jennifer Schulp. Together, the group faced questions about the intersection of social media, hedge funds and small investors that use Robinhood. The wild volatility in GameStop’s stock — which soared nearly 3,000% in January — has sparked criticism from lawmakers about Robinhood’s business practices and its links to Wall Street. While Robinhood touts free trading to small investors, it makes its money by routing orders to market makers including Citadel Securities. Tenev said that the company receives more than 50% of its income from such transactions. “I’m sorry for what happened,” Tenev said, adding that the company is reviewing its processes. “I apologize. I’m not… Read full this story
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