Texas Attorney General Ken Paxton Launches Investigation into Robinhood and Discord for Stock Market Rigging
Texas Attorney General Ken Paxton has launched an investigation into Robinhood and Discord for possible coordinated criminal activity to restrict access to stocks shorted by Wall Street hedge funds elites.
Paxton cited what he called “coordinated corruption by a cabal of oligarchs” in announcing the investigation, with the American financial system implicated in price rigging and corruption in potentially unprecedented fashion.
Today I’m launching an investigation into @RobinhoodApp, @discord, and hedge funds who rigged our free mkt for the benefit of Wall St elites.
The US econ should be transparent, open. This week’s coordinated corruption by a cabal of oligarchs shows it isn’t. I’ll help fix that.
— Attorney General Ken Paxton (@KenPaxtonTX) January 29, 2021
The two companies, which offer different services, potentially violated financial laws in different ways. Robinhood, a commission-free brokerage investing firm, restricted access to red-hot stocks that had been shorted by hedge funds. This served to prevent the share prices of stocks such as GameStop and AMC from rising, ensuring that hedge fund elites wouldn’t lose money through liabilities in shares that they’ve sold after borrowing.
Robinhood blocked its customers from buying GameStop, AMC and Nokia shares as a buying run from retail investors shot up their prices. This served to depress their values in the interests of the hedge funds shorting these stocks, with many Robinhood users calling for a class-action lawsuit against the platform for its interference in the stock market.
Discord shut down the r/WallStreetBets server earlier this week, preventing retail investors from discussing developments on finance and the stock market. Many other Big Tech platforms have shut down independent financial discussion forums, fearing that informed retail investors would catch on to deceptive strategies used by Wall Street hedge funds and call their bluff. The San Francisco company arbitrarily cited violations of its terms of service for banning the server, only to back down and reinstate the server the next day. Facebook also suspended a Robinhood Stock Trading group from its service, acting in seemingly coordinated fashion with other social media companies.
Holding corrupt oligarchs accountable for rigging the American system has proved notoriously difficult, but it’s possible that AG Paxton could deliver.