(CBS DFW) – Amidst the chaos on Wall Street, Texas Attorney General Ken Paxton said Friday that he has launched an investigation into Discord, Robinhood and various other companies that suspended stock trading this week.
“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,” Paxton said in a tweet.READ MORE: Stimulus Check Update: Is A Fourth Relief Payment In Your Future?
The events began when independent investors communicating on Reddit, specifically the WallStreetBets subreddit, started purchasing GameStop shares, driving up the price. AMC Theaters, American Airlines, and Bed Bath & Beyond became hot commodities, too.
Hedge funds that had bet against the struggling companies lost large sums. Trading platforms, like Robinhood, intervened to try to stabilize the market this week by preventing their own customers from buying more shares of certain companies. It fueled a backlash.
Today I issued CIDs to @RobinhoodApp, @discord, @Citadel, and others that suspended stock trading and investing. This apparent coordination to shut down threats to their market dominance is shockingly unprecedented and wrong.
Read copies of the CIDs ⬇️https://t.co/mp2ZahCkQJREAD MORE: Child Tax Credit: Parents Will Soon Get A Monthly Check, But For How Much?
— Texas Attorney General (@TXAG) January 29, 2021
In a news release from his office, Paxton said he issued 13 civil investigative demands (CIDs) to Discord, Robinhood Financial, Robinhood Markets, Robinhood Securities, Interactive Brokers, TD Ameritrade, TD Bank, E-Trade, WeBull Financial, Public Holdings, M1 Holdings, Citadel Financial and Apex Clearing Corporation.
Discord, a popular digital communication platform, became involved after, Paxton said, it limited, controlled or prevented access to the r/WallStreetBets server.
“Wall Street corporations cannot limit public access to the free market, nor should they censor discussion surrounding it, particularly for their own benefit. This apparent coordination between hedge funds, trading platforms, and web servers to shut down threats to their market dominance is shockingly unprecedented and wrong. It stinks of corruption,” Paxton said. “I’m hopeful that these companies will step up and cooperate with these CIDs in order to clear any confusion over why stock purchases were forcibly closed and why even conversation around these stocks was silenced.”MORE NEWS: American Families Plan: What's In It, And How Could It Put Money In Your Pocket?
Copies of the CIDs from Paxton can be read here.