In GameStop Saga, Robinhood Is Cast as the Villain

Politicians from both parties wanted to identify a villain for the mania that surrounded the trading in GameStop stock last month that roiled the markets, alarmed Wall Street and made winners and losers of many small investors. On Thursday, they took aim at the chief executive of Robinhood, the free trading app that fueled much of the buying and selling.

At a congressional hearing conducted via videoconference, members of the House Financial Services Committee grilled Vlad Tenev: Why did Robinhood curb trading in GameStop? Was the start-up doing the bidding of Wall Street? And how clearly did it communicate its business model to its customers?

“You are at the center of this,” Representative David Scott, a Democrat from Georgia, told Mr. Tenev, who received more than half of all the questions asked at the hearing. “Don’t you see and agree that something very wrong happened here? And that you are at the center of it?”

[“Let’s not gaslight the American people”: Read full coverage of the GameStop hearing.]

Lawmakers called the hearing to try to make sense of why the stock of GameStop — a troubled video game retailer that was once a mainstay of suburban malls — had attracted so many small investors in late January. They also wanted to know whether Wall Street players that were involved in the trading benefited at the expense of those small investors, and whether the events highlighted shortcomings of market structure or regulation.

But mostly, they wanted to know if Robinhood, a Silicon Valley start-up that rode to success on the strength of its message to democratize finance, was actually encouraging customers to take unnecessary risks and making money at their expense.

Along with Mr. Tenev, those called to testify were Kenneth C. Griffin, the founder of Citadel, a hedge fund, and Citadel Securities, a trading firm; Gabriel Plotkin, the founder of a hedge fund that lost money on GameStop; Keith Gill, an individual investor whose bullish posts about GameStop drove some of the buying; Steve Huffman, the chief executive of Reddit; and Jennifer J. Schulp, a financial markets expert.