Quotes: Key quotes from the GameStop testimonies: 'I am not a cat'

Citadel Income Fund

18/02/2021 20:55

(Adds quotes throughout)
    Feb 18 (Reuters) - At a grilling by lawmakers over the
frenzied trading in retailer GameStop  GME.N , Keith Gill, a
YouTube streamer known as Roaring Kitty, hedge fund managers and
the head of Robinhood and Reddit defended their actions. 
    Those testifying were Robinhood CEO Vlad  Tenev, Melvin
Capital CEO Gabriel  Plotkin, Citadel CEO Ken Griffin and Reddit
CEO Steve Huffman.  urn:newsml:reuters.com:*:nL4N2KN3PN
    Here are the testimonies https://docs.house.gov/Committee/Calendar/ByEvent.aspx?EventID=111207
 of the players involved and a link https://www.reuters.com/article/retail-trading-congress-profiles/the-wall-street-players-at-the-gamestop-hearing-idUSL1N2KK0EZ
 to biographies of some of them.  urn:newsml:reuters.com:*:nL1N2KK0EZ 
    Some quotes from the hearing: 
    
    KEITH GILL: 
    "A few things I am not. I am not a cat. I am not an
institutional investor, nor am I a hedge fund. I do not have
clients and I do not provide personalized investment advice for
fees or commissions. I am just an individual whose investment in
GameStop and posts on social media were based upon my own
research and analysis."
    "Investing can be risky and my approach can be risky but for
me personally, yes (I would buy GameStop now). Yes, I do find it
attractive at this price point."  
    "My investment in Gamestock was based on the fundamentals." 
    "Increased transparency could help. That someone like me
could have a better understanding of how those things work ...
would help retail investors." 
    
    ROBINHOOD CEO VLAD  TENEV: 
    "We always felt comfortable with our liquidity... The
additional capital we raised wasn’t to meet capital requirements
or deposit requirements... " 
    "I recognize customers were very upset (from the
restrictions on trading)... it would have been significantly
worse if we had prevented customers from selling." 
    "Not at all, zero pressure (from anyone on the panel to
decide to restrict trading), it was a collateral depository
decision."  
    "I’m sorry for what happened. I apologize. I’m not going to
say that Robinhood did everything perfect and we haven’t made
mistakes in the past, but what I commit to is making sure that
we improve from this, learn from it, and we don’t make the same
mistakes in the future. And Robinhood as an organization will
learn from this and improve and make sure it doesn’t happen
again, and I will make sure of that."  
    "I do believe that the ability for the same share to be
shorted an indefinite number of times is somewhat of a pathology
and that should be fixed and I think step one of that is
modernizing the antiquated settlement infrastructure that
everything is built on. We simply don’t have the ability to
properly track which shares have been shorted and how many times
as they are moving through our settlement system."  
    "Robinhood owns what happened and we need to make sure it
doesn't happen again but Robinhood Securities had limited
options and I believe the team did the right thing and the only
thing. 
    "Payment for order flow is one of our largest revenue
sources. Yes (it is the largest.)"
    
    CITADEL CEO KEN GRIFFIN 
    "As I was trying to explain... the quality of the execution
varies by the channel of the order, this is a commonly
understood phenomenon in economics."
    "We have fought for 15 years to make that the basis by which
orders are allocated because we strongly believe Citadel is
better to provide better execution for retail orders in the long
run." 
    "We are able to share our trading acumen with retail
investors, give them a better price and give payments for
orderflow to firms like Robinhood. 
    "This has been very important for the democratization of
finance."  
    “I believe that the short interest in Gamestop was
exceptional. I’m not sure it’s worth us delving into legislative
corrections for a very unique situation."
    "We of course are talking to Robinhood as we manage a
substantial portion of their order flow. 
    "Absolutely not (whether they contacted Robinhood about
restricting trading in GameStop)."    
    "We don't own DTCC. We are not party to the discussion/
dialogue between DTCC and Robinhood. We have literally nothing
to do with DTCC other than being a member of DTCC... Citadel
Securities owes a duty of best execution for every order that
comes from Robinhood and I'm proud of how seriously our team
takes that best execution."  
         
    MELVIN CAPITAL CEO GABRIEL  PLOTKIN
    "I think it is a really good question (regarding more
reporting around shorting). It is not for me to decide. But if
those are the rules then I will certainly abide by them." 
    "Anytime we short a stock, we locate a borrower. Our systems
actually force us to find a borrower."
    "In 2014 at our inception (we took a short position in
GameStop) 
    "I dont remember (what it was worth) at the time. Maybe $40.
We believed the company had a lot of structural challenges. 
    "Our systems won't allow that (a naked short position) so it
wouldn't be possible to do."  
    
    REDDIT CEO STEVE HUFFMAN
    "We spend a lot of time at Reddit ensuring the authenticity
of our platform. So we’ve got a large team dedicated to this
exact task. Everything on Reddit - all of the content is created
by users, voted on by users and ranked by users, and we make
sure that that is authentic, and as unmanipulated as possible.
And in this specific case, we did not see any signs of
manipulation."

 (Reporting by John McCrank, Elizabeth Culliford, Svea Herbst
and Noel Randewich; Compiled by Megan Davies; Editing by Dan
Grebler, Nick Macfie and David Gregorio)
 ((megan.davies@thomsonreuters.com; +1 646 223 6190;))