Statement: GameStop Hearing Will Highlight Hazards of Wall Street’s Games
WASHINGTON, D.C. – Today, the U.S. House Financial Services Committee will hold a virtual hearing entitled: “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide?” Public Citizen submitted written testimony, and Susan Harley, managing director of Public Citizen’s Congress Watch division, released the following statement:
“Today’s hearing on the GameStop trading frenzy is sure to expose much that has gone awry with our capital markets, from conflicts of interest to gamification and manipulation, but one issue that should get screen time is the hidden costs of high-frequency trading for average investors.
“High-frequency trading firms like Citadel, the CEO of which is slated to testify, are alleged to front-run retail customers’ trades which generally increases costs for investors, especially everyday savers invested in large ‘whales’ like pension and retirement funds.
“Congress must address this hidden penalty on investors by making high-frequency trading unprofitable. By enacting a tiny financial transaction tax that is clear and transparent, it would both help diminish speculative trading and progressively generate much-needed revenues to reinvest in American communities.”