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3.59pm EST15:59
Tenev admits Robinhood did not have the collateral to back the huge increase in trade

3.31pm EST15:31
Are Robinhood users better off than the average investor?

2.44pm EST14:44
Tenev addresses the suicide of a former customer

1.42pm EST13:42
​Tenev defends decision to freeze buying of GameStop

1.04pm EST13:04
Reddit CEO and Reddit user involved in r/WallStreetBets forum testify

12.12pm EST12:12
House committee hears testimony from those involved in trading controversy

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4.19pm EST16:19

Representative questions whether it is reckless to gamify investment
Cindy Axne of Iowa targeted Tenev with questions about the Robinhood app’s design and the consequences of gamifying trade. She asked who truly stands to benefit from the rise of Robinhood, which Tenev has repeatedly asserted aims to “democratize” investment.
“Your clients are not your customer – the users are the product, your customer is sitting next to you – it’s companies like Citadel securities that stand to make a fortune on retail order flow,” Axne said.
Axne noted that Robinhood incentivizes inviting friends to the app and gamification of trading, “adding gaming elements that look like gambling.”

Updated
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4.08pm EST16:08

Robinhood took from its customers to boost its own business model, lawmaker alleges
Michael San Nicolas of Guam, a Democrat, congratulated the small investors who orchestrated the short squeeze: “Robinhood made that possible,” he said.
But he also questioned Tenev about the $3bn shortage, and where the money borrowed to cover it came from. Tenev said he got $3bn from venture capitalists, which San Nicolas argued means Robinhood materially benefited from the shareholders.
San Nicolas said Robinhood’s Silicon Valley ethos of “move fast and break things” led it to value scale over anything else.
“That’s where I have a serious concern,” he said. “Your business model causes you to take extraordinary risks, and you took from customers to protect your position. That is very, very troubling.”

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3.59pm EST15:59

Tenev admits Robinhood did not have the collateral to back the huge increase in trade

Vlad Tenev admitted during questioning on Thursday that Robinhood halted buying on the platform because it did not have the funds to back the huge influx of trading in the Reddit frenzy.
Robinhood is required to place a deposit using its own funds at a clearinghouse to cover risks until trades are settled between a buyer and seller. On 28 January, the company was informed by its clearing house, NSCC, that it had a deposit deficit of approximately $3bn – up from $124m just days before.
Anthony Gonzalez, a Republican from Ohio, asked if Robinhood indeed had that $3bn of collateral at the time.
“At that moment, we would not have been able to post the $3bn of collateral,” Tenev said.
Gonzalez said that proves Robinhood was “unprepared to protect his constituents and customers from non-consensual liquidation” and “barely avoided disaster”.
“In a sense, I love your company,” Gonzalez said. “At the same time, I believe a vulnerability was clearly exposed.”

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3.36pm EST15:36

Reddit CEO is asked if financial advice on the forum can be trusted
Steve Huffman, CEO of Reddit, conceded in questioning on Thursday that users on the forum responsible for the GameStop buy-up are an “eccentric” bunch but that they did not breach any of the platform’s terms of service.
He said financial advice on Reddit, in fact, is better than what is seen on TV because each post has been vetted by its voting process, which requires endorsement by hundreds and even thousands of users before it is widely visible. Huffman:

On Reddit you’re seeing retail investors who are giving authentic advice based on their knowledge, and you would not call into question positions they may hold before they talk about it on television.

3.31pm EST15:31

Are Robinhood users better off than the average investor?

One issue that has come up repeatedly in today’s hearing is what Robinhood has to offer consumers, besides ease of entry into the investment space.
Lawmakers’ questioning has offered a rare look into the profit model of Robinhood and just how much customers have made and lost on the app.
Jim Himes, a Democratic representative of Connecticut, asked Robinhood CEO Vlad Tenev whether customers would make more if they had bought a low-cost S&P 500 index fund rather than individual stocks on Robinhood’s app.
Tenev said that Robinhood customers have made $35bn in profits, but is unwilling to say what rate of return that represents. Himes said that number means little without more context.

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2.53pm EST14:53

Did Reddit’s coordinated buying represent market manipulation? Expert says no
The meteoric rise of GameStop stocks was fueled largely by a frenzy on Reddit community r/WallStreetBets. Arkansas Republican Representative French Hill asked Thursday whether that constituted “market manipulation” – artificially impacting the price of a security or otherwise influencing the market for personal gain.
Keith Gill, who is also speaking on Thursday’s panel, has been sued in a class action lawsuit accusing him of exaggerated claims and misrepresented posts as part of his role on Reddit in kicking off the GameStop market frenzy, which personally netted him more than $30m.
“I think there’s little evidence at this time that there’s any false or deceptive conduct taking place,” said Jennifer Schulp, director of financial regulations studies at the Cato Institute speaking on the forum.
She did say due to the anonymous nature of Reddit it is possible there is some “deceptive behavior” that could not readily be determined. Other have argued that Robinhood’s freezing of GameStop stocks in response to the buy-up itself represented market manipulation.

Updated
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2.44pm EST14:44

Tenev addresses the suicide of a former customer

Robinhood chief executive officer Vlad Tenev addressed in the hearing on Thursday the suicide of a 20-year-old man that was tied to the trading platform.
The family of Alex Kearns is currently suing Robinhood in a California court after the newbie trader took his own life believing he owed $730,000 due to a glitch on the app, a year before the Reddit investing frenzy that caused many to gain or lose huge sums of money in a very short time.
His death led to former SEC chair Jay Clayton and current lawmakers calling for better legislation to prevent such losses from happening in the future.
In Thursday’s hearing, Congressman Emanuel Cleaver II of Missouri asked Tenev to explain how someone with no experience could invest such a potentially devastating amount of money in such a short time. Tenev again cited Robinhood’s mission of “democratizing finance for all”. His full response below:

The passing of Mr. Kearns was deeply troubling to me, and to the entire company. We have taken a series of very aggressive steps to make our products safer for our customers, including adding additional education, as well as strengthening and tightening the requirements for getting options and bettering our customer support line. It was a tragedy and we went into immediate action to make sure that we are not just the most accessible option for trading for our customers but the safest as well.

Updated
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1.57pm EST13:57

Everyone is shouting
Representative Brad Sherman, Democrat from California, had some pointed questioning for Citadel owner Ken Griffin regarding how the average trader on Robinhood is treated compared to more wealthy Wall Street traders and larger firms.
He asked about payment for order flow – a controversial practice in which stock brokers get a kickback for essentially selling the ability to execute trades. This allows some larger customers to avoid paying higher transaction fees. Sherman said it is a means for hiding the true costs of trading.
Griffin kept attempting to skirt the question: “Congressman, I believe that’s an excellent question – the execution quality that we can provide as measured by terms of price improvement is heavily related or correlated to the size of the order we receive.”
“Everybody I’ve talked to in this industry says when you’re a broker being paid for order flow, you get a worse execution,” Sherman replied, referencing the dealing in which Robinhood is paid for its customers’ trades by market-makers like Citadel.
Finra fined Robinhood $1.25 million in December 2019 for this practice, saying it sent customer trading orders to broker-dealers without guaranteeing the best price.
Griffin defended the payment for order flow practice, saying “it has allowed the American retail investor to have the lowest execution cost they’ve ever had in the history of US financial markets”.
Sherman also repeatedly asked if the average Robinhood customer gets the same deals and prices as larger firms like Fidelity.
“Is the Robinhood customer getting the same price as the Fidelity customer?” Sherman asked Griffin.
Griffin wouldn’t say, talking around the answer and explaining that it can’t be determined “because the Robinhood community tends to be smaller in quantity” before getting cut off again.
“You’re evading questions by making up other questions,” Sherman shouted. “You are doing a great job of wasting my time. If you want to filibuster you should run for the Senate.”

Updated
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1.42pm EST13:42

​Tenev defends decision to freeze buying of GameStop

Tenev, Robinhood’s CEO, said customers would have been very angry if it had prevented them from selling off GameStop shares.
During the Reddit-fueled meltdown, Robinhood banned the purchase of GameStop buying, but not selling. Many have speculated this was done at the behest of hedge funds who stood to lose millions from the buy-up, which Tenev disputed.
“Preventing customers from selling is a very difficult and painful experience where customers are unable to access their money,” Tenev said. “We don’t want to impose that type of experience on our customers unless we have no other choice.”

Updated
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1.34pm EST13:34

Lawmakers roast Robinhood CEO
In addition to comments from Waters, Robinhood CEO Vlad Tenev faced intense criticism from other lawmakers.
Carolyn Maloney, a Democrat from New York, accused Tenev of recklessly handling customers’ money.
“You reserve the right to make up the rules as you go along,” she said.
“I’m sorry for what happened,” Tenev replied. “I’m not going to say that Robinhood did everything perfect.”

Updated
at 1.47pm EST

1.10pm EST13:10

Chairwoman Maxine Waters is reclaiming her time
Maxine Waters, the chairwoman of the House committee on financial services, took a stern tone with executives involved in the hearing on Thursday.

manny
(@mannyfidel)
Maxine Waters: yes or noRobinhood CEO: pic.twitter.com/3oDUwsdD7P

February 18, 2021

She frequently interrupted Robinhood CEO Vlad Tenev, demanding he actually answer the questions she was posing as he meandered around the point. Waters stated “yes or no, answer the question” a minimum of ten times in the first hour of the hearing.

Emily Stewart
(@EmilyStewartM)
Maxine Waters to the Robinhood CEO: “I don’t have time, I just need a yes or no answer.” Tattoo it on my arm.

February 18, 2021

Updated
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1.04pm EST13:04

Reddit CEO and Reddit user involved in r/WallStreetBets forum testify

Reddit CEO Steve Huffman explained in his opening statement how Reddit moderation works, what the r/WallStreetsBets community is, and how Reddit dealt with the January stock buy-up.
He said WallStreetBets is a “real community” with real users.
He added that Reddit’s content policy prohibits “hate, harassment, bullying and illegal activity” and that threats or harassment of Plotkin and others were removed.
“A few weeks ago, we saw the power of community in general and of this community in particular when the traders of WallStreetBets banded together at first to seize an investment opportunity not usually accessible to retail investors, but later more broadly to defend all retail investors against the criticism of the financial establishment,” Huffman said.
Later, a member of that community testified. Reddit user “Roaring Kitty”, real name Keith Gill, started his opening statement by telling lawmakers “I am not a cat”.
He stressed that he is simply an individual talking about this investment choices, not making suggestions for investments in any official or professional capacity. The goal of his posts, and of the Reddit community, was to make trading more understandable and accessible to the average person.
“It’s alarming how little we know about the inner workings of the market,” Gill said.

Updated
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12.48pm EST12:48

Melvin Capital CEO Gabriel Plotkin claims the company was not looking for a bailout
Gabriel Plotkin, CEO of one of the hedge funds hit by the coordinated Reddit trades, claims Melvin did not coordinate or ask for Robinhood’s ban on trading.
The GameStop frenzy targeted hedge funds like Melvin with huge short positions in GameStop, which had bet the share price would fall and stood to cash in when it did so. After the Reddit-fueled surge, the fund lost 53% in January. It reportedly received a $2bn+ capital infusion from Citadel as its losses grew.
“To be sure, Melvin was managing through a difficult time, but we always had margin excess and we were not seeking a cash infusion,” Plotkin said.
He says he was the subject of antisemitic and threatening posts on Reddit surrounding the markets incident.
“I want to make clear at the outset that Melvin Capital played absolutely no role in those trading platforms’ decisions,” said Plotkin. “In fact, Melvin closed out all of its positions in GameStop days before platforms put those limitations in place.”

Updated
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12.38pm EST12:38

Citadel owner Ken Griffin: we had ‘no role’ in Robinhood’s decision to restrict certain stocks
Ken Griffin is the billionaire owner of hedge fund Citadel and high-speed trading firm Citadel Securities, which works with Robinhood.
He said in testimony on Thursday that the firm provided securities to meet investors’ needs during the unprecedented surge of trading of GameStop stocks, but had “no role” in the decision made by Robinhood to restrict trading of those stocks.
The incident “reflects the competence of our firm’s ability to deliver in all market conditions”, he said.

12.33pm EST12:33

Opening statements: Robinhood, Citadel, and Melvin Capital CEOs
We are off running with some opening statements from the biggest players in the Reddit-fueled stock market meltdown.
First, Robinhood CEO Vlad Tenev spoke about how he came to found Robinhood, talking of his childhood in Bulgaria, where the financial system was “on the verge of collapse”. Tenev said he wanted to give more people access to financial systems.
“We created Robin Hood to economically empower all Americans by opening mutual markets to them,” he said.
He referenced just how much money has been created by Robinhood investments, saying “the total value of our customers’ assets on Robinhood exceeds the net amount of money they have deposited with us, over $35bn”.
Next, Citadel CEO Kenneth Griffin and Melvin Capital CEO Gabriel Plotkin will speak.

Updated
at 1.13pm EST

12.12pm EST12:12

House committee hears testimony from those involved in trading controversy

Executives from the investing site Robinhood, the social media site Reddit, and other tech companies are testifying on Thursday in the first public hearing in an investigation into a recent public trading meltdown orchestrated on social media.
The House financial services committee will hear testimony from parties involved in the recent trading in GameStop, AMC cinemas and other companies whose share values soared to astronomical levels as small investors piled into the stocks.
We’ll follow the hearing live throughout the day – stay tuned.

Updated
at 12.19pm EST More

As Texas struggled on Thursday with a disastrous lack of power, food and water following the deadly storm that brought Arctic temperatures to the southern US, the state’s Republican leadership stood battered by a growing outcry over mismanagement of the power grid and a painfully slow emergency response.Residents huddled at elementary schools in makeshift “warming centers”, moved in with any relatives and friends who have heat – despite the coronavirus risks – or simply held out inside their homes in deteriorating conditions.Some do not have enough water to drink, let alone wash. Others are dealing with flooding from burst pipes, unreliable gas and electricity service and “boil water” notices spreading to additional major cities. And with at least two dozen confirmed deaths in the state since the weekend storm, the National Weather Service announced on Wednesday that a new storm front would likely bring another round of frigid temperatures to Texas and “significant ice accumulations”.The immediate risks for the most vulnerable residents remained exposure, malnourishment and the threat of fires or carbon monoxide poisoning as residents sat inside cars, brought grills indoors, and used fireplaces for the first time in years in an attempt to stay warm.But the state’s Republican governor, nationally elected officials and Republican-led state legislature were dealing separately with a growing backlash at the inability to restore power for days as residents stood in long lines for paltry supplies of groceries and queued for miles for gasoline.A focus of particular wrath on Thursday was Senator Ted Cruz, who was spotted leaving frigid Houston Wednesday on a flight bound for Cancun, Mexico, the popular beach destination south of the border.Cruz “is vacationing in Cancun right now when people are literally freezing to death in the state that he was elected to represent and serve”, the former Texas congressman Beto O’Rourke, who made a strong run against Cruz for his Senate seat in 2018 and then ran for president in the 2020 election, said on MSNBC.O’Rourke blamed decades of Republican leadership in the state for failing to embrace alternative energy and maintain durable energy infrastructure. “There has been complete Republican control of the state of Texas for 20 years,” O’Rourke said.Cruz finally confirmed he had taken the trip and on Thursday afternoon was returning to Houston.In an effort to stay ahead of constituents’ wrath about the power crisis and lack of preparedness or information, the governor, Greg Abbott, announced a full-scale investigation into the state’s standalone energy utility – whose leadership Abbott himself appointed. He also tried to shift the blame for the power grid failure to a supposed failure of windmills, which account for about 7% of power generation in Texas.“This shows how the Green New Deal would be a deadly deal for the United States of America,” Abbott said on Fox News.That was a gross mischaracterization of the power crisis, which Abbott elsewhere admitted was brought on mainly by frozen natural gas pipelines that had knocked power plants offline.“Every source of power Texas has has been compromised,” Abbott said at a news conference on Wednesday.On Thursday at a White House briefing, the press secretary, Jen Psaki, said that weather effects on solar and wind energy in Texas were “the least significant factors” in the disaster.And homeland security adviser Liz Sherwood-Randall said the dire storms “demonstrate to us that climate change is real and it’s happening now and we’re not adequately prepared for it”.Both the state plants and the pipelines are run by the state utility, the Electric Reliability Council of Texas (Ercot), which was set up independent of other states’ grids so that Texas, whose economy is built on the fossil fuels industry, would not be as subject to federal energy regulations.Even with the grid in tatters, the arrangement was worth it, declared former Texas governor Rick Perry, a Republican who served as energy secretary under Donald Trump.“Texans would be without electricity for longer than three days to keep the federal government out of their business,” Perry wrote in a blogpost.Residents might disagree. More than 130 of the state’s 254 counties were experiencing water outages or potential contamination, and more than 250,000 residents had not had water service for three days, according to state data.Store shelves were cleared of food, lines formed at public spigots in parks, firewood was hard to come by and out-of-state plumbers were invited to come work on an epidemic of burst pipes. Hospitals reported oxygen shortages and nursing homes and dialysis centers struggled to stay online.The Texas national guard was deployed across the state to check on residents and move them to shelters. The Federal Emergency Management Agency had sent blankets, provisions, generators and fuel “to ensure the continued availability of backup power,” the White House said. Joe Biden declared a state of emergency in Texas last Sunday.“We have state leadership – Governor Abbott, Lieutenant Governor [Dan] Patrick – that want to point fingers at everything except the problem,” the San Antonio Democratic politician Julián Castro told MSNBC.Ercot’s chief executive, Bill Magness, asked residents for patience. “I am sure when we review this, we’re going to find things we wish we’d done better,” he said in a televised address.In Houston the emergency recalled the devastation from Hurricane Harvey in 2017 and the flooding that ensued.But then as now, no elected Republican could be heard to warn that the state must take action to address the climate change emergency. Instead they sent the opposite message.“Bottom line: thank God for baseload energy made up of fossil fuels,” Representative Dan Crenshaw, a Texas Republican with a growing national profile, tweeted on Wednesday. More

Robinhood’s chief executive defended the app’s decision to halt trading in GameStop shares at a congressional hearing on Thursday, calling allegations that the company acted to help hedge funds that were hemorrhaging money “absolutely false”. The comments triggered accusations the company is creating a “smokescreen” to deflect blame.Vlad Tenev and other players in the GameStop saga appeared before the House financial services committee in the first public hearing in a wide-ranging investigation into trading in GameStop, AMC and other companies whose share values soared as small investors piled into the stocks.“The buying surge that occurred during the last week of January in stocks like GameStop was unprecedented, and it highlighted a number of issues that are worthy of deep analysis and discussion,” Tenev said.Tenev once again apologized for the trading ban. “Despite the unprecedented market conditions in January, at the end of the day, what happened is unacceptable to us,” Tenev said.The sometimes fractious hearing was largely divided along party lines, with Democrats calling for more oversight and Republicans arguing against more regulation.“Don’t you see something has gone terribly wrong here?” said Democrat congressman David Scott. He called social media-led stock market bubbles “a threat to the future of our financial system”.Republican Bill Huizenga called the hearing “political theater”, a comment that drew admonition from the committee chair, Maxine Waters.GameStop’s shares surged 1,600% in January as small investors worldwide – many coalescing on the Reddit forum WallStreetBets – piled into the troubled retailer’s shares betting against Wall Street hedge funds that had bet the share price would collapse – a practice known as short-selling. At one point, short-sellers had borrowed far more of GameStop’s shares (140%) to sell short than were available on the market.According to Tenev, Robinhood and other brokers had no choice but to suspend trading in GameStop and other hot investments during this period of “historic volatility”.Robinhood is required to place a deposit using its own funds at a clearinghouse to cover risks until trades are settled between a buyer and seller. On 28 January, the company was informed by its clearing house, NSCC, that it had a deposit deficit of approximately $3bn – up from $124m just days before.With trading in hot stocks suspended, Robinhood moved to raise $3.4bn from investors and trading was resumed.But the suspension triggered a firestorm of criticism among small investors and in Washington, with Republicans and Democrats attacking Robinhood and accusing it of backing the losing hedge funds over small investors.Christopher Iacovella, the chief executive of the brokerage-industry group American Securities Association, dismissed Tenev’s explanation and said the system had worked as it should to defend the US’s financial system.“As the GME [GameStop] short squeeze unfolded, the clearinghouse recognized that an inadequately capitalized broker-dealer could pose a risk to our markets and it took the action necessary to protect the system,” Iacovella said in a letter to the House committee. “Attempts to blame the clearinghouse or the timing of the settlement cycle for what happened during the short squeeze are a smokescreen.”Thursday’s hearing, titled Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide, is the first of a series and addressed a number of issues including the “gamification” of investing, the role of social media and potential conflicts of interest.The representatives questioned the role of Citadel, an investment firm that executes Robinhood clients’ trades and also invested in Melvin Capital Management after the hedge fund’s bets against GameStop collapsed.Both Citadel’s founder, Ken Griffin, and Melvin’s founder, Gabe Plotkin, testified at the hearing. In his testimony, Plotkin denied that Citadel “bailed out” Melvin. “It was an opportunity for Citadel to ‘buy low’ and earn returns for its investors if and when our fund’s value went up,” he said.Plotkin said January’s frenzied trading in GameStop was “untethered to fundamentals” and quoted racist messages aimed at him and others, including antisemitic statements such as “it’s very clear we need a second Holocaust, the Jews can’t keep getting away with this.”“The unfortunate part of this episode is that ordinary investors who were convinced by a misleading frenzy to buy GameStop at $100, $200, or even $483 have now lost significant amounts,” said Plotkin.GameStop’s share price has now collapsed from a high of $483 on 28 January to just over $44. But one of the small investors who helped drive the stock to dizzy heights is still a believer.In his testimony Keith Gill, a trader variously known online as Roaring Kitty and DeepFuckingValue, said his investments had made him a millionaire.“GameStop’s stock price may have gotten a bit ahead of itself last month, but I’m as bullish as I’ve ever been on a potential turnaround. In short, I like the stock,” he said. More

Rick Perry, the former Texas governor who became Donald Trump’s energy secretary, has said that Texans would willingly endure longer periods of sub-freezing temperatures if it stymied Democrats’ energy policy and efforts to combat climate change.“Texans would be without electricity for longer than three days to keep the federal government out of their business,” Perry was quoted saying in blog post published Wednesday on the website of Republican congressman Kevin McCarthy.The blog post had asserted that those “watching on the left may see the situation in Texas as an opportunity to expand their top-down, radical proposals. Two phrases come to mind: don’t mess with Texas, and don’t let a crisis go to waste”.Perry’s comments come as millions of Texas are struggling with a brutal winter storm, which created a surge in demand for electricity to warm up homes unaccustomed to such extreme lows, buckling the state’s power grid and causing widespread blackouts. Frigid temperatures and snow have covered most of the central US this week, resulting in at least two dozen deaths, but Texas in particular has reeled because most of its power is on a state-run grid that has repeatedly been described as mismanaged.Residents of the Lone Star state are lining up for grocery stores that are running out of food. Pipes have burst because of the cold, leaving residents without water to drink or prepare food. Many are scrambling to find shelter in buildings with electricity. Multiple municipalities have instituted “boil water” orders, as power outages have impacted water treatment facilities.Meanwhile, many Texans slammed authorities for their handling of the crisis. The severe winter storm has, among some Republicans, been used to open up a new culture war around the expansion of renewable energy, which is a stated priority of the Biden administration in order to address the climate crisis.Perry was among the many Republicans who falsely claimed that frozen wind turbines spurred the mass electricity shutdowns. In reality, the utility system’s failure to prepare for perils presented by cold temperatures – such as frozen natural gas pipes – had a significantly larger role in this crisis.Renewable energy sources such as wind did see failures; these lapses contributed to 13% of Texas’ power outages, while generating approximately 25% of the state’s winter energy. But sources such as coal, gas, and nuclear power ceded nearly twice as many gigawatts of power due to the low temperatures.Nonetheless Greg Abbott, Texas’ governor, voiced anti-wind sentiments similar to Perry’s.“This shows how the Green New Deal would be a deadly deal for the United States of America,” the Republican governor told Fox News host Sean Hannity on Tuesday. “Our wind and our solar got shut down, and they were collectively more than 10% of our power grid, and that thrust Texas into a situation where it was lacking power on a statewide basis … It just shows that fossil fuel is necessary.”Abbott’s attack contradicts the operators of the Texas grid, which is overwhelmingly run on gas and oil, who have confirmed the plunging temperatures caused gas plants to seize up at the same time as a huge spike in demand for heating. Nevertheless, images of ice-covered wind turbines, taken in Sweden in 2014, were shared widely among conservatives on social media as proof of the frailty of clean energy.Alexandria Ocasio-Cortez, the Democratic congresswoman behind the Green New Deal platform, said that Abbott was “blaming policies he hasn’t even implemented for his own failures” while the renewable energy industry also hit back.“It is disgraceful to see the longtime antagonists of clean power engaging in a politically opportunistic charade misleading Americans,” said Heather Zichal, chief executive of the American Clean Power lobby group.Oliver Milman contributed to this report. More

Sign up for the Guardian’s Fight to Vote newsletterHappy Thursday,This week, midway through Black History Month, I wanted to open up the archives and look at some of the history that helped shape the Voting Rights Act, the powerful 1965 law that offered some of the most significant protections for voting rights in US history. As I’ve covered the struggle over voting rights over the last several years, and amid a push for sweeping new federal voting protections, I’ve often found myself turning back to the fight over the act to understand how efforts to restrict the vote today mirror what has occurred before.I was struck recently by these two telegrams, exchanged days apart in March 1965, between Martin Luther King Jr and Lyndon B Johnson. King sent the telegram the morning after Johnson gave a speech to Congress introducing the law – a speech that has since been described as one of the greatest speeches by a sitting US president.The horrific images of Bloody Sunday – the 7 March 1965 voting rights march in Selma, Alabama, where law enforcement brutally beat protesters as they demonstrated for voting rights – had galvanized the country, and Johnson, to move quickly to embrace the legislation.In his speech, Johnson linked what had happened in Selma to some of the most well-known battles in US history, tying the struggle for voting rights to the historical battle for American freedom.“At times history and fate meet at a single time, in a single place, to shape a turning point in man’s unending search for freedom. So it was at Lexington and Concord. So it was a century ago at Appomattox. So it was last week in Selma, Alabama,” Johnson opened his speech.King praised Johnson’s speech.“Your speech to the joint session of Congress last night was the most moving eloquent unequivocal and passionate plea for human rights ever made by any president of this nation,” King wrote from Selma. “You evidenced amazing understanding of the depth and dimensions of the problems that we face in our struggle, your tone was sincere throughout and your persuasive power never more forceful.”Days later, Johnson wrote back, saying he appreciated the comments from the civil rights leader.“I sincerely believe the that the mood of the country and the Congress offers us an opportunity to secure legislation which will provide a direct, quick, effective and constitutional means of ensuring all citizens will be able to register and vote,” he wrote. “I fully appreciate the pressures and tensions under which you are laboring and I am confident you will continue to offer a course of leadership that will permit us to move towards our goal of universal suffrage.”The telegrams underscore just how significantly Selma had changed the calculus on pushing voting rights legislation. In a 2015 essay, Julian Zelizer, a historian at Princeton University, wrote that Johnson was hesitant about moving the bill so early in the year, as King and other civil rights leaders pressured him to move quickly. In choosing to give the speech after Selma, Johnson signaled he was embracing the activists. It was an example of how activism can work.“Delivering that speech was a courageous decision,” he wrote. “Despite strong opposition in Washington to the federal government committing itself to the protection of African American voters, Johnson delivered a powerful speech that left no doubt of where he stood in this debate,” he wrote.Less than five months after the telegram, Johnson signed the Voting Rights Act into law.Also worth watching …Georgia advanced two measures in the state legislature that would make it harder to vote by mail. One measure would eliminate a provision in state law that allows anyone to vote by mail without an excuse, while another would require each voter to provide a copy of their voter ID during the vote by mail process.
A Republican in the Arizona legislature broke with his party to vote down a measure that would allow the state to remove people from a list of people who automatically receive a mail-in ballot each election.
The US supreme court is set to hear a case from Arizona that could have major implications for the Voting Rights Act. The court, if it wants to, could choose to narrow a section of the Voting Rights Act and make it harder to challenge discriminatory voting laws in the future. More

Millions of people in Texas have spent days in below-freezing temperatures without power in what officials have called a “total failure” of the state’s electricity infrastructure. How did oil- and gas-rich Texas – the biggest producer of energy in the US – get here?While there are many factors that led to the power outages in Texas, the state’s power grid has come under intense scrutiny in light of the storm. Here’s what we know so far about Texas’s power grid and the role it played in the state’s winter disaster.Who controls Texas’s power grid?The “Lone Star” statelikes to go it alone when it comes to delivering power to its residents. Texas is unique among the 48 contiguous US states in that it relies on its own power grid. The other 47 states are all part of the two power grids that service the eastern and western halves of the country.The Electric Reliability Council of Texas, known as Ercot, manages the state’s power grid. Ercot is technically a non-profit corporation, and while it functions independently from the state’s government, the corporation is overseen by a state agency called the Public Utility Commission of Texas. Members of the commission are appointed by the state’s governor.Texas is the only state in the country, besides Alaska and Hawaii, that is not part of either the Eastern Interconnection or Western Interconnection, the two main power grids in the US. This means that Texas is not regulated by the Federal Energy Regulatory Commission (Ferc), the agency that oversees interstate electric transmission. Instead, Texas is basically “an electrical island in the United States”, as described by Bill Magness, CEO of Ercot. While this means that Texas has more control over electricity in the state, it also means there are fewer power plants the state can rely on for power.Parts of Texas are not serviced by Ercot. El Paso at the western tip of the state gets power from the Western Interconnection, which is why the city has been saved from the most brutal effects of the power outages.Why are so many people without power?Ercot turned off power for millions of customers after several power plants shut down due to the below-freezing temperatures the state is experiencing. Officials at Ercot said the equipment at the plants could not handle the extreme, low temperatures. The choice was either shutting down power for customers or risking a collapse of the grid altogether.Why is Texas on its own power grid?For as long as electricity has existed in Texas, the state, which prides itself on its independence has relied on itself for power. Officials in the state have long had a stubborn will to stay out of the hands of federal regulators.While Magness, Ercot’s CEO, said that the shutdown was due primarily to “reasons that have to do with the weather”, critics have said Texas’s energy market incentivizes cheap prices at the cost of delaying maintenance and improving power plants. In 2011, the state experienced similar blackouts, though for a shorter period of time compared with what has been seen this week.Following those blackouts, the Ferc gave a series of recommendations to Ercot to prevent future blackouts, including increasing reserve levels and weatherizing facilities to protect them from cold weather.Ed Hirs, an energy fellow at the University of Houston, told the Washington Post that Ercot “limped along on underinvestment and neglect until it finally broke under predictable circumstances”.Did renewable energy play a role in the grid’s malfunction?While Republicans have been blaming frozen wind turbines for the state’s blackouts, officials and experts say that malfunctions in natural gas operations played the largest role in the power crisis.Ercot said all of its sources of power, including those from renewable sources, were affected by the freezing temperatures. The state largely relies on natural gas for its power supply, though some comes from wind turbines and less from coal and nuclear sources.Natural gas can handle the state’s high temperatures in the summer, but extreme cold weather makes it difficult for the gas to flow to power plants and heat homes. Michael Webber, an energy resources professor at the University of Texas Austin, told the Texas Tribune that “gas is failing in the most spectacular fashion right now”.With the climate crisis likely to trigger more freak weather events like the one Texas is suffering it is noteworthy that there are places that experience frigidly cold weather that rely heavily on wind turbines and manage to have electricity in the winter. In Iowa, a state which sees freezing temperatures more often than Texas, nearly 40% of electricity is generated by wind turbines.What are officials doing to prevent future blackouts?With millions still without power as of late Wednesday, officials in Texas remain focused on getting power back to residents and remedying the damage from the storm. Politicians from both major parties have criticized Ercot for its handling of the storm, but officials have steered clear of providing examples of specific fixes. Texas’s governor, Greg Abbott, has called for an investigation into Ercot, declaring it an emergency item for the state’s legislative session.But some Texas leaders have made it clear that they believe Texas should remain independent from the national power grids. Rick Perry, a former governor of the state who also served as Donald Trump’s energy secretary until 2019, said: “Texans would be without electricity for longer than three days to keep the federal government out of their business.” More

Frenzied trading in the shares of GameStop and other companies will be the subject of what is expected to be a fiery hearing in Congress on Thursday, when US politicians get their first chance to quiz executives from the trading app Robinhood, Reddit and other players in the saga.The House financial services committee will hold a hearing at noon in a first step to untangling the furore surrounding trading in GameStop, AMC cinemas and other companies whose share values soared to astronomical levels as small investors piled into the stocks.The hearing, titled Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide, is expected to be fractious.Shares in GameStop, a troubled video games chain store, soared 1,600% in January, as an army of small investors, many using the trading app Robinhood, appeared to have bet that Wall Street hedge funds had overplayed their hand when betting the stock price would collapse – a practice known as short-selling.Spurred on by meme-toting members of the Reddit forum WallStreetBets, investors kept buying the shares, driving up the price and triggering huge losses for some hedge funds.Robinhood briefly suspended trading in GameStop and other hot stocks at the end of January and sparked allegations that the hedge funds and others may have pushed Robinhood and other trading platforms to stop the rout.The news managed to – briefly – unite Washington’s deeply divided political elite. Both the rightwing senator Ted Cruz and the progressive representative Alexandria Ocasio-Cortez attacked Robinhood’s decision to halt trading in GameStop by small investors.Ocasio-Cortez sits on the bipartisan financial services committee.Among those testifying are:Robinhood’s CEO, Vlad Tenev.
Reddit’s CEO, Steve Huffman.
Gabe Plotkin, founder of the Melvin Capital Management hedge fund, which was forced into a rescue after retail traders crushed its bets against GameStop.
Ken Griffin, billionaire CEO of Citadel, an investment firm that executes Robinhood clients’ trades and also helped to bail out Melvin.
Keith Gill, a trader variously known online as Roaring Kitty and DeepFuckingValue and a longtime GameStop booster.
The hearing marks the first time the major players in the GameStop controversy have all been forced to publicly reckon with the anger the episode provoked among small investors and across the political spectrum.Gregg Gelzinis, associate director for economic policy at the Center for American Progress, said: “The GameStop drama raised quite a few public policy questions but first it’s important for members of Congress to understand how events played out.”Gelzinis said there were still questions about the timeline of events. More broadly, he said, GameStop had highlighted many crucial issues for regulators, including the role and regulation of hedge funds, whether or how Wall Street is using social media to drive investment strategy, the “gamification” of investing by trading apps and the economic incentives at play for the trading platforms.“What would have happened if Robinhood had failed? What would have been the knock-on effects for financial markets?” he asked. “These are huge investor protection questions.“I saw someone on Twitter describe it as a Rorschach test for financial regulators,” he added.The hearing will not be the last inquiry that the executives at the center of the controversy will face. Federal prosecutors have begun an investigation, according to the Wall Street Journal, and the Securities and Exchange Commission, the US’s top financial watchdog, is reportedly combing through social media posts for signs of potential fraud.In the meantime, evidence has emerged that small investors were not the largest buyers of GameStop and other hot companies. According to an analysis by JP Morgan, institutional investors may have been behind much of the dramatic rise in the share price.“Although retail buying was portrayed as the main driver of the extreme price rally experienced by some stocks, the actual picture may be much more nuanced,” Peng Cheng, a JP Morgan analyst, told clients in a note.Gelzinis said Thursday’s hearing was likely to raise as many new questions as it answered but was a necessary first step to understanding the seismic changes in investing that GameStop highlighted.“This is only the start of the story,” he said. “It’s clear this is not just a clearcut small investor versus Wall Street story. It’s a fairly messy picture but hopefully by the end we can paint a clearer picture and draw up some public policy conclusions from it.” More