Robinhood drew millions of small, often young investors into the market last year with its popular trading app but has faced fines, lawsuits and accusations that it has failed to protect its customers. It enraged lawmakers on the left and right this week when it shut down purchases of the skyrocketing GameStop stock for a day, sending its shares plunging along with those of other companies, even as hedge funds and other sophisticated Wall Street players were allowed to continue trading.
The fervor will ensnare a wide range of Wall Street players, igniting what many critics say is a long overdue debate about whether the complex structure of the market serves average investors or is fraught with conflicts of interest and susceptible to manipulation.
“I am deeply concerned that these casino-like swings in the value of GameStop and other company shares are yet another example of the gamesmanship that interferes with the ‘fair, orderly, and efficient’ function of the market, raising obvious questions about public confidence in the market and those trading in it,” Sen. Elizabeth Warren (D-Mass.) said Friday in a letter to the SEC.