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Rep. Hill: Stock trading frenzy raised 'a lot of questions' - YouTube
Channel: Fox Business
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all right now to a fox business alert
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just in for maxine waters
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uh the congresswoman who's the chair of
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the house financial services committee
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she has just announced
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to reuters that she will hold a hearing
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on the trading and gamestop and some of
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these other viral
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stocks that we've been covering here's a
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quote from
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congresswoman waters we must deal with
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the hedge funds whose
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unethical conduct directly led to the
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recent market volatility
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and we must examine the market in
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general and how it's been manipulated by
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hedge funds and their financial partners
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to benefit themselves while
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others pay the price the democratic
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congresswoman maxine waters joining now
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republican congressman french hill from
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arkansas who's also a member of that
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committee so congressman it's good to
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have you on the show again
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the lot that you guys could focus on
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here as we've watched this develop over
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the last
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few days where do you think the primary
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focus of congressional hearings
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should be well thanks for having me this
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is
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certainly reminiscent of what we saw the
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dot-con
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boom what we've seen in certain
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commodity spikes like in the silver
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crisis of 1979 when you have a
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a run-up in a stock and you have
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unsophisticated players in it
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and sophisticated players and it reaches
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a
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critical moment that's raised a lot of
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questions on capitol hill from both
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republicans and democrats
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not only on the short selling part but
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also on
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the option trading in the stock by
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retail investors
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their information their qualifications
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are those firms
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qualifying their investors and make sure
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they're eligible for option trading
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i'm sure all these will be questions
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that we'll look at
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okay so when you look at it from the
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retail investors point of view we hear
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you know politicians all the same all
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the time say we're trying to protect
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um you know the little guy in this case
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retail investors
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how do you do that some argue you have
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to protect them from themselves which
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might mean more regulation in the
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industry
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others say no you have to give them more
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freedom so that the
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playing field is level uh for example
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robin hood
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which is this uh trading platform which
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many retail investors use today it
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stopped
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these people from being able to buy
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gamestop and other stocks it's since
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said here in the last few minutes it's
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going to allow limited buying of the
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stocks tomorrow seems to be
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backtracking but is that something
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you'll look at and if so what's your
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view on that
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well look i think there are a lot of
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rules that finra has in overseeing
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broker dealers like
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robin hood robin hood is a registered
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broker-dealer they have an
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obligation to make sure that their
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investors have the information they need
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to do trading on their platform
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particularly when you're doing uh option
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trading which is typically a very
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sophisticated strategy
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it's good that robin hood's opened up
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and democratized
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investing for retail investors but they
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still have to understand
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what they're getting into and our laws
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are written to be
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buyer beware you need to understand what
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you're doing when you're making short
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and long-term investment decisions
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that burden is on the indivisible
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individual
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and i happen to think that finra's rules
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on option trading disclosure
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and that kind of thing for investors are
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sufficient
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and in my view i don't think you should
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stop the investing though i think that
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is something that we'll look into
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when we have the hearing okay
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uh so the rules are sufficient but what
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that last part so you'll look into what
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what what specifically would you like to
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tackle
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if the if the rules are well where well
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where they've uh the broker dealer has
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said you can't buy or sell a stock
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uh to an individual investor that's
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something that merits uh
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explanation when we have the hearing
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okay sounds like robinhood is aware of
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that maybe because they've they've
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pulled back and they were facing a
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number of class action lawsuits as well
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it was remarkable to date politically to
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see you know likes of aoc
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congresswoman from new york alexandria
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casio cortez actually in agreement with
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with ted cruz at one moment so you think
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there's bipartisan consensus
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uh to do something here and if so is it
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on the side
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of the retail investor rather than on
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the side of the
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of the hedge funds and the big wall
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street investors
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well i don't think we have dogs dating
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cats here yet
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but i think both sides want to ask their
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questions
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and get answers about what happened here
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part of this is we have new platforms we
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have
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reddit's a role in this that's much more
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significant and much bigger than it was
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back in the dot com
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boom where you just had bulletin boards
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you have the fractionalization and
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smaller dollars by retail investors
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you have all that working in conjunction
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with the securities laws and as i said
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looking at the short selling in the
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stock to begin with
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all this will make for a robust hearing
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when we have one at the house financial
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services committee
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a lot of people would argue that you
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know short selling still has a role
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in in a market does do you agree with
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that or are you are you talking about
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actually
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looking into outlawing or putting some
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restrictions on short selling itself
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no i think short selling plays an
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important role in the markets that's how
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it's important part of price discovery
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just like i think retail investors
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having the ability to invest small
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amounts of money
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and invest actively in the market by not
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having to buy a
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a round lot in equity investing that's
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good too
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but all these things can be taken to
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extreme and i'm
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very interested to learn the facts on
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what happened both in the gamestop
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stock as well as amc and some of these
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others
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right and whether maybe there's
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something we're missing here um as we
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kind of watch all this play out in real
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time congressman we'll watch it on the
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on the hearings as well it's good to see
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you again thanks for coming good to see
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you
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congressman french hill
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