On February 18 (tomorrow), the House Financial Services Committee will hold a hearing on the recent Robinhood-GameStop controversy. CEI Senior Fellow John Berlau cautioned lawmakers to avoid new restrictions on investor choices and to instead look for ways to help investors gain access to information on risk and opportunity.
Statement by John Berlau:
“The new fintech investing landscape offers middle-class investors new opportunities to build wealth, as well as some new risks. Thursday’s hearing should focus not on paternalistically restricting investors’ choices but instead look for ways to improve information for investors on new risks and opportunities. Members of Congress should also look at ways to reduce barriers so that options for more stable investments are available to middle-class investors as well as wealthy ‘accredited’ investors.
“In looking at the trading restrictions private firms such as Robinhood placed on investors, the hearing should take an honest look at whether these firms acted wrongly but also whether and to what extent government regulations contributed to these decisions. And if it is found that regulations were a factor, Congress should modernize these rules so that investors face fewer barriers to what they can buy and sell.”