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'Let them trade': Washington struggles with Robinhood politics – Financial Times

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Later this month, the co-founder of Robinhood is likely to find himself being grilled by angry lawmakers in Washington, who are demanding answers over his company’s role in the GameStop trading saga.

Vlad Tenev’s appearance on February 18, which has not yet been formally announced, would come against the backdrop of a wave of populist outrage, after his online brokerage was attacked for imposing limits on trading in GameStop and other stocks that had soared amid wild enthusiasm from retail investors.

Mr Tenev has said the company imposed restrictions after the clearing houses that settle trades demanded it stump up more margin, but the curbs prompted howls of foul play among retail investors, who claim they favoured hedge funds that had placed large bets against the stocks.

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Their anger has been taken up by lawmakers across the political spectrum, from Alexandria Ocasio-Cortez, the leftwing Democratic representative from New York, to Ted Cruz, the Republican senator from Texas.

Last week Ms Ocasio-Cortez was one of the first to suggest a need for congressional hearings as she described the restrictions as “unacceptable”.

“We now need to know more about Robinhood’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit,” she said on Thursday.

But the politics are complex. This week, the value of GameStop shares and other stocks favoured by the army of retail investors have plunged, leaving many nursing significant paper losses.

The attention from lawmakers could quickly shift from whether the trading restrictions imposed by Robinhood and others were unfair to whether more should have been done to prevent people buying stocks that had become overvalued after being egged on by others on social media sites such as Reddit.

“What’s frustrating to me is that too many people are getting caught up in stick-it-to-the-man narrative, which admittedly is an attractive narrative,” Jim Himes, the Democratic member of the House from Connecticut, told the Financial Times.

“It’s being used in the service of exposing some retail investors to huge risk, and I think they’ve probably already been very badly hurt,” he added.

The GameStop affair comes at a time of transition in Washington, with Joe Biden’s new administration vowing a tougher approach to financial regulation compared with Donald Trump.

As early as Thursday, Janet Yellen, the US Treasury secretary, is expected to convene a meeting of regulators from the Federal Reserve, the Federal Reserve Bank of New York, the Securities and Exchange Commission and the Commodity Futures Trading Commission to discuss the issues surrounding Robinhood and GameStop. Gary Gensler, Mr Biden’s pick to be SEC chairman, has however yet to be confirmed for his post.

“Secretary Yellen believes the integrity of markets is important and has asked for a discussion of recent volatility in financial markets and whether recent activities are consistent with investor protection and fair and efficient markets,” a Treasury spokesperson said late on Tuesday.

Any immediate regulatory action taken in response to the GameStop affair is likely to be narrow in scope, including the enforcement of rules against market manipulation, or higher capital requirements for online brokerages such as Robinhood.

But the episode could stoke a more intense political debate about the policing of US equity markets, taxation and disclosure requirements related to hedge funds, and even the Federal Reserve’s loose monetary policies, which have been blamed for fuelling asset bubbles and risk-taking.

“If this sort of craziness continues, and it spreads to other stocks and bigger stocks and just keeps going . . . there’s going to be a real clamouring for something to be done, but I think we’re not there yet,” said Ian Katz, an analyst at Capital Alpha Partners.

Members of Congress have seized the opportunity to make a flurry of declarations about the need to tighten financial rules so they benefit ordinary Americans.

“The way we do things with the big banks and Wall Street in this country — that system is broken,” Sherrod Brown, the incoming Democratic chair of the Senate banking committee, said in a TikTok video on Tuesday. “We do hearings on this, and we fight back.”

Although Mr Brown’s comments suggest the need for fundamental reform of Wall Street regulation, for now much of the political ire is being focused squarely on Robinhood. Elizabeth Warren, the Democratic senator from Massachusetts, this week sent a letter to the company suggesting its ties to certain hedge funds had driven its decision to curb trades.

“The public deserves a clear accounting of Robinhood’s relationships with large financial firms and the extent to which those relationships may be undermining its obligations to its customers,” Ms Warren wrote.

Robinhood declined to comment.

Brad Sherman, the California Democrat who sits on the House financial services committee, said the hearing with Robinhood should serve to determine whether the platform “acted to depress the price” or was put in a position where it had taken on too much risk to “effectuate transactions”.

But he said the episode had raised red flags about excessive risk-taking in the financial system. “If you want to play a video game you should go to GameStop and buy it, not go to Robinhood and buy the stock,” he said.

Tony Fratto, a former senior Treasury official under George W Bush and founder of Hamilton Place Strategies, a consultancy, said critics of existing regulation had ill-defined policy goals.

“How would you propose to regulate this kind of activity out of existence? I haven’t seen a single one of them tell me what that solution is,” he said, adding: “Do they want the SEC policing chat rooms? Are we going to force disclosure on social media?”

For Mr Himes, the big risk of a knee-jerk reaction in Washington is that it could end up being counterproductive, especially if it results in the scrapping of safeguards for ordinary investors instead of bolstering them.

“When Ted Cruz says ‘let them trade’, make no mistake: he’s saying ‘let’s have a libertarian market where people are not protected from the consequences of their decisions’,” Mr Himes says.

“And he’s also saying, ‘let’s remove things like margin requirements and smart regulation around unsophisticated investors getting into options trading’.”

Additional reporting by Lauren Fedor in Washington

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Iran news: Canada, G7 urge de-escalation after Israel strike – CTV News

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Canada called for “all parties” to de-escalate rising tensions in the Mideast following an apparent Israeli drone attack against Iran overnight.

G7 foreign ministers, including Canada’s, and the High Representative for the European Union released a public statement Friday morning. The statement condemned Iran’s “direct and unprecedented attack” on April 13, which saw Western allies intercept more than 100 bomb-carrying drones headed towards Israel, the G7 countries said.

Prior to the Iranian attack, a previous airstrike, widely blamed on Israel, destroyed Iran’s consulate in Syria, killing 12 people including two elite Iranian generals.

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“I join my G7 colleagues in urging all parties to work to prevent further escalation,” wrote Foreign Affairs Minister Melanie Joly in a post on X Friday.

More details to come.

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Politics Briefing: Labour leader targets Poilievre, calls him 'anti-worker politician' – The Globe and Mail

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Hello,

Pierre Poilievre is a fraud when it comes to empowering workers, says the president of Canada’s largest labour organization.

Bea Bruske, president of the Canadian Labour Congress, targeted the federal Conservative Leader in a speech in Ottawa today as members of the labour movement met to develop a strategic approach to the next federal election, scheduled for October, 2025.

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“Whatever he claims today, Mr. Poilievre has a consistent 20-year record as an anti-worker politician,” said Bruske, whose congress represents more than three million workers.

She rhetorically asked whether the former federal cabinet minister has ever walked a picket line, or supported laws to strengthen workers’ voices.

“Mr. Poilievre sure is fighting hard to get himself power, but he’s never fought for worker power,” she said.

“We must do everything in our power to expose Pierre Poilievre as the fraud that he is.”

The Conservative Leader, whose party is running ahead of its rivals in public-opinion polls, has declared himself a champion of “the common people,” and been courting the working class as he works to build support.

Mr. Poilievre’s office today pushed back on the arguments against him.

Sebastian Skamski, media-operations director, said Mr. Poilievre, unlike other federal leaders, is connecting with workers.

In a statement, Skamski said NDP Leader Jagmeet Singh has sold out working Canadians by co-operating with the federal Liberal government, whose policies have created challenges for Canadian workers with punishing taxes and inflation.

“Pierre Poilievre is the one listening and speaking to workers on shop floors and in union halls from coast to coast to coast,” said Mr. Skamski.

Prime Minister Justin Trudeau and Mr. Singh are scheduled to speak to the gathering today. Mr. Poilievre was not invited to speak.

Asked during a post-speech news conference about the Conservative Leader’s absence, Bruske said the gathering is focused on worker issues, and Poilievre’s record as an MP and in government shows he has voted against rights, benefits and wage increases for workers.

“We want to make inroads with politicians that will consistently stand up for workers, and consistently engage with us,” she said.

This is the daily Politics Briefing newsletter, written by Ian Bailey. It is available exclusively to our digital subscribers. If you’re reading this on the web, subscribers can sign up for the Politics newsletter and more than 20 others on our newsletter signup page. Have any feedback? Let us know what you think.

TODAY’S HEADLINES

Pierre Poilievre’s top adviser not yet contacted in Lobbying Commissioner probe: The federal Lobbying Commissioner has yet to be in touch with Jenni Byrne as the watchdog probes allegations of inappropriate lobbying by staff working both in Byrne’s firm and a second one operating out of her office.

Métis groups will trudge on toward self-government as bill faces another setback: Métis organizations in Ontario and Alberta say they’ll stay on the path toward self-government, despite the uncertain future of a contentious bill meant to do just that.

Liberals buck global trend in ‘doubling down’ on foreign aid, as sector urges G7 push: The federal government pledged in its budget this week to increase humanitarian aid by $150-million in the current fiscal year and $200-million the following year.

Former B.C. finance minister running for the federal Conservatives: Mike de Jong says he will look to represent the Conservatives in Abbotsford-South Langley, which is being created out of part of the Abbotsford riding now held by departing Tory MP Ed Fast.

Ottawa’s new EV tax credit raises hope of big new Honda investment: The proposed measure would provide companies with a 10-per-cent rebate on the costs of constructing new buildings to be used in the electric-vehicle supply chain. Story here.

Sophie Grégoire Trudeau embraces uncertainty in new memoir, Closer Together: “I’m a continuous, curious, emotional adventurer and explorer of life and relationships,” Grégoire Trudeau told The Globe and Mail during a recent interview. “I’ve always been curious and interested and fascinated by human contact.”

TODAY’S POLITICAL QUOTES

“Sometimes you’re in a situation. You just can’t win. You say one thing. You get one community upset. You say another. You get another community upset.” – Ontario Premier Doug Ford, at a news conference in Oakville today, commenting on the Ontario legislature Speaker banning the wearing in the House of the traditional keffiyeh scarf. Ford opposes the ban, but it was upheld after the news conference in the provincial legislature.

“No, I plan to be a candidate in the next election under Prime Minister Trudeau’s leadership. I’m very happy. I’m excited about that. I’m focused on the responsibilities he gave me. It’s a big job. I’m enjoying it and I’m optimistic that our team and the Prime Minister will make the case to Canadians as to why we should be re-elected.” – Public Safety Minister Dominic LeBlanc, before Question Period today, on whether he is interested in the federal Liberal leadership, and succeeding Justin Trudeau as prime minister.

THIS AND THAT

Today in the Commons: Projected Order of Business at the House of Commons, April. 18, accessible here.

Deputy Prime Minister’s Day: Private meetings in Burlington, Ont., then Chrystia Freeland toured a manufacturing facility, discussed the federal budget and took media questions. Freeland then travelled to Washington, D.C., for spring meetings of the International Monetary Fund and the World Bank Group. Freeland also attended a meeting of the Five Eyes Finance Ministers hosted by U.S. Treasury Secretary Janet Yellen, and held a Canada-Ukraine working dinner on mobilizing Russian assets in support of Ukraine.

Ministers on the Road: Foreign Affairs Minister Mélanie Joly is on the Italian island of Capri for the G7 foreign ministers’ meeting. Heritage Minister Pascale St-Onge, in the Quebec town of Farnham, made an economic announcement, then held a brief discussion with agricultural workers and took media questions. Privy Council President Harjit Sajjan made a federal budget announcement in the Ontario city of Welland. Families Minister Jenna Sudds made an economic announcement in the Ontario city of Belleville.

Commons Committee Highlights: Treasury Board President Anita Anand appeared before the public-accounts committee on the auditor-general’s report on the ArriveCan app, and Karen Hogan, Auditor-General of Canada, later appeared on government spending. Crown-Indigenous Relations Minister Gary Anandasangaree appears before the status-of-women committee on the Red Dress Alert. Competition Bureau Commissioner Matthew Boswell and Yves Giroux, the Parliamentary Budget Officer, appeared before the finance committee on Bill C-59. Former Prince Edward Island premier Robert Ghiz, now the president and chief executive officer of the Canadian Telecommunications Association, is among the witnesses appearing before the human-resources committee on Bill C-58, An act to amend the Canada Labour Code. Caroline Maynard, Canada’s Information Commissioner, appears before the access-to-information committee on government spending. Michel Patenaude, chief inspector at the Sûreté du Québec, appeared before the public-safety committee on car thefts in Canada.

In Ottawa: Governor-General Mary Simon presented the Governor-General’s Literary Awards during a ceremony at Rideau Hall, and, in the evening, was scheduled to speak at the 2024 Indspire Awards to honour Indigenous professionals and youth.

PRIME MINISTER’S DAY

Justin Trudeau met with Ottawa Mayor Mark Sutcliffe at city hall. Sutcliffe later said it was the first time a sitting prime minister has visited city hall for a meeting with the mayor. Later, Trudeau delivered remarks to a Canada council meeting of the Canadian Labour Congress.

LEADERS

Bloc Québécois Leader Yves-François Blanchet held a media scrum at the House of Commons ahead of Question Period.

Conservative Leader Pierre Poilievre attends a party fundraising event at a private residence in Mississauga.

Green Party Leader Elizabeth May attended the House of Commons.

NDP Leader Jagmeet Singh, in Ottawa, met with Saskatchewan’s NDP Leader, Carla Beck, and, later, Ken Price, the chief of the K’ómoks First Nation,. In the afternoon, he delivered a speech to a Canadian Labour Congress Canadian council meeting.

THE DECIBEL

On today’s edition of The Globe and Mail podcast, Sanjay Ruparelia, an associate professor at Toronto Metropolitan University and Jarislowsky Democracy Chair, explains why India’s elections matter for democracy – and the balance of power for the rest of the world. The Decibel is here.

PUBLIC OPINION

Declining trust in federal and provincial governments: A new survey finds a growing proportion of Canadians do not trust the federal or provincial governments to make decisions on health care, climate change, the economy and immigration.

OPINION

On Haida Gwaii, an island of change for Indigenous land talks

“For more than a century, the Haida Nation has disputed the Crown’s dominion over the land, air and waters of Haida Gwaii, a lush archipelago roughly 150 kilometres off the coast of British Columbia. More than 20 years ago, the First Nation went to the Supreme Court of Canada with a lawsuit that says the islands belong to the Haida, part of a wider legal and political effort to resolve scores of land claims in the province. That case has been grinding toward a conclusion that the B.C. government was increasingly convinced would end in a Haida victory.” – The Globe and Mail Editorial Board.

The RCMP raid the home of ArriveCan contractor as Parliament scolds

“The last time someone was called before the bar of the House of Commons to answer MPs’ inquiries, it was to demand that a man named R.C. Miller explain how his company got government contracts to supply lights, burners and bristle brushes for lighthouses. That was 1913. On Wednesday, Kristian Firth, the managing partner of GCStrategies, one of the key contractors on the federal government’s ArriveCan app, was called to answer MPs’ queries. Inside the Commons, it felt like something from another century.” – Campbell Clark

First Nations peoples have lost confidence in Thunder Bay’s police force

“Thunder Bay has become ground zero for human-rights violations against Indigenous Peoples in Canada. Too many sudden and suspicious deaths of Indigenous Peoples have not been investigated properly. There have been too many reports on what is wrong with policing in the city – including ones by former chair of the Truth and Reconciliation Commission Murray Sinclair and former Toronto Police board chair Alok Mukherjee, and another one called “Broken Trust,” in which the Office of the Independent Police Review Director said the Thunder Bay Police Service (TBPS) was guilty of “systemic racism” in 2018. – Tanya Talaga.

The failure of Canada’s health care system is a disgrace – and a deadly one

“What can be said about Canada’s health care system that hasn’t been said countless times over, as we watch more and more people suffer and die as they wait for baseline standards of care? Despite our delusions, we don’t have “world-class” health care, as our Prime Minister has said; we don’t even have universal health care. What we have is health care if you’re lucky, or well connected, or if you happen to have a heart attack on a day when your closest ER is merely overcapacity as usual, and not stuffed to the point of incapacitation.” – Robyn Urback.

Got a news tip that you’d like us to look into? E-mail us at tips@globeandmail.com. Need to share documents securely? Reach out via SecureDrop.

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GOP strategist reacts to Trump’s ‘unconventional’ request – CNN

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GOP strategist reacts to Trump’s ‘unconventional’ request

Donald Trump’s campaign is asking Republican candidates and committees using the former president’s name and likeness to fundraise to give at least 5% of what they raise to the campaign, according to a letter obtained by CNN. CNN’s Steve Contorno and Republican strategist Rina Shah weigh in.


03:00

– Source:
CNN

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