Well well: well, just under a year and a half after the retail trading community had its eyes blown wide open by basically having money stolen from it. I'm referring to january 28, 2021, where retail figured out they could take away the buy button. I'm talking about jimmy amc, no bb cost the list goes on and on and on well congress, particularly the house looked into this event and surprise surprise. They agree worrisome, business practices, inadequate risk management, the clear need and desire for proper legislation and reform they're on board.

With us, but as you're about to find out from some of the filings, we just got they're basically shrugging their shoulders and said: hey that really sucked to be you in the past and maybe we'll do our best to try to fix it in the future. As i get through this video, when i touch on what was discussed by the house and what they found in their opinion of it, some of the facts and figures are going to be jaw-dropping and other parts of it are going to make your blood absolutely boil. So remember, don't shoot the messenger here, but what you're about to hear and what you're about to see it's truly insane. Now throughout this video i am going to be citing some sources and i'll make sure all those links are in the description below with all that.

Other way, let's get right into it. Luckily, for us we can sleep easy at night, knowing that our congress has our back, obviously i'm being a little bit sarcastic, but it is interesting what they found. Unfortunately, it doesn't seem like they have much of. I guess the power or influence, but really what i should say is the willpower to get anything done.

That should properly be done to fix the current downfalls of our market system. The house committee on financial services just dropped. This game stopped how the meme stock market event exposed troubling business practices, inadequate risk management and the need for legislative and regulatory reform. So this all came basically what was started by the gamestop saga and obviously our congress moved slower than molasses and just under a year and a half later, they looked into it and they agree.

They found out some very messed up things. I will post this below. If you want to read through it, as you can see, is about 140 pages, but here are the key takeaways robinhood, the main brokerage utilized by so many retail traders and investors exhibited troubling business practices, inadequate risk management in a culture that prioritizes rapid growth and above Stability during the meme stock market event broker dealers facing the most severe operational and liquidity concern executed, the most expansive trading restrictions during the memesoc market event. This is where it gets a little bit crazy, so basically they're telling us hey they sucked as a business, and they were putting growth above everything else.

Bro growth profit all that, but the numbers are really what's crazy. Here. The dtcc also known as the depository trust and clearing corp, those are the that's the organization that, when someone buys and someone sells when we're talking about a two-day settlement, that's the organization, basically a kabul of all these brokerages and market makers. They're like okay.

This person bought this person sold like let's get the money over here. Let's get the stock over here to from one broker to the other, so they're like the ones who kind of do all that type of matching when the trades are settling. So anyway, the dtcc wave 9.7 billion with a b of collateral deposit requirements on january 28, 2021. The dtcc lacks detailed written policies and procedures for waiver or modification of a disincentive charge and calculates for brokers that are deemed to be under capitalized and has regularly waived.

Such charges during periods of acute volatility in the two years before the meme stock market event, so basically they're, saying hey. We kind of have this like unknown or hard to digest rule set of how much capital you should have with us because remember at the end of the day, the brokerage goes to the dtcc and it's all on their net settlement, not their growth. So, throughout the day, typically, there's a lot of buying and selling and they go to the net, be like okay. We owe you a little cash or you owe us a little stock and like they transfer what they need to, but in certain events, such as january 28, 2021.

There's a huge imbalance on one side as in buying buying buying buying. So they have to have all the money sending at the dtcc to buy all that stock and they didn't have enough money and when they start to look at the rules, which of course are unknown to the public. The house congress itself. Financial services even said these rules are confusing they're, not appropriate and they're hard to apply, and they don't really make much sense.

It's truly insane. Those are the key takeaways, but i want to dive into some of the other couple things i found in here that stood out to me. Now i do implore you. The best breakdown of this by far was from dave, lauer, so i'll make sure to link that twitter below, and you can see his breakdown of the major things.

But the things i want to share to you is when they took away the buy button. Remember the buy button wasn't taken from everyone, because if the pi button was taken from everyone, well, no one was buying it when people were selling it because remember it was pc owed position close only so when people were selling someone had to buy. So this wasn't for everyone. It was just mainly the brokerages that a lot of retail traders were on.

Please understand that, but when you put so much of retail the people who are really behind this into position clothes only, that means they're only closing they're, either closing or doing nothing and clearly, when you have this much selling pressure, it's going to go down, but we Finally, have some numbers to put to that: the total dollar amount of gme held by robinhood markets, customers decreased from a peak of 2.6 billion dollars before the firm enacted trading restrictions on the 28th down to 1.2 billion, as in there was a 1.4 billion dollar drop-off. The total dollar amount of amc held by robin hood customers decreased from 1.3 billion down to 411 million. That's a change of 900 million dollars in the same time frame. Ultimately, these trading restrictions and outages, limited market access for ordinary retail investors and undermine confidence in market integrity.

Obviously so we're on this the same page of yep, something happened should not have happened and now we're getting to the point of like what are you gon na? Do about it and that's the frustrating part, because that's exactly when congress is uh, i don't know that type of a deal which rightfully so is truly insane, and i think you have a right to be frustrated. The other thing i want to highlight to you is right here. Finally, the committee's investigation discovered evidence of multiple broker deals: third-party clearing operations, market makers, public stock exchanges and others suffering technology outages during the meme stock market event. Outages are particularly concerning about market makers, who are, by many accounts lightly regulated and play an increasingly significant role in executing retail trades, so right there lightly regular.

Like now, our congress has clearly admitted that they know market makers are lightly regulated. I don't know how to drive this home even more, because it sounds insane that it's actually in a government document and now skipping forward a little bit. Instead, robin hood was solely reliant on its market maker firms to execute trades, most of whom were struggling under significant operational stress in the face of historic volume and volatility. Had the market makers, robin hood routinely rooted orders to been unable to accept its order flow.

The company would have been unable to execute trades for its customers when people are talking about systematic risks and a point of failure. This is the roundabout way to explain that this is in reference to citadel securities, who is the market maker for robin hood, the retail wholesaler, whatever you want to call it? That's who they're referring to and in this scenario now congress is understanding that, if you rely on this one person because contractually they have to because that's what payment for order flow is pfoth, it's all going directly right to citadel if they failed. That is a systematic risk and i guess you could play cute with how you want to define it, but it's so blatantly in front of our faces and now clearly because of this write-up from the house from congress, they're, allegedly all on the same page. So it's insane that we're still talking about some of this stuff, because the government has amended it.

They see where it went awry and now we're at the point of like okay cool we're on the same page, you in a minute like uh, i, i guess sure this is just so ridiculous. The best analogy i could come up with all of this is retail, as a group was at the casino and they bet on green on the roulette wheel and they spun the ball and the market, the casino they know it's not common to land on green, so They were willing to take that bet, assuming it wasn't going to hit because they're gon na keep all that money. In this metaphor, it ended up hitting the same way jimmy started to rip and then all of a sudden, the casino started to realize. Oh wait.

We don't have the money to pay out that bet, so we're just gon na bust. The bet we're gon na say it doesn't count and then all of a sudden, whoever, i guess, regulates casinos. They walk in and they're like oh yeah, that sucks they shouldn't do that. They should have the money here and then they're like okay.

Maybe next time try to fix it. That's the crazy part. It's like the regulators. In this scenario.

They realize how messed up it is and still no one gets in trouble, they're getting away completely scot-free. It's insane. A congressional report just gave an inside peek at the confusion and chaos inside robin hood amid the meme sock trading frenzy. So, basically, because of this report, we now have other detailed information.

I think this is just a good thing to really highlight. What's going on, but overall, this revealed systemic flaws in the operations of both retail super brokers like robinhood and the regulatory environment in which they operate. This revealed how rapid growth and innovation and retail trading presents novel issues for market stability and orderliness, and neither the industry nor regulators have satisfactorily anticipated or addressed it. So we now know that they haven't anticipated it or addressed it, and the question is okay.

Well, are you gon na address what just happened and also for the future, or are we all just gon na shrug our shoulders and hope that none of this ever happens again? What's crazy is the actual look into what robinhood was saying that day and you could tell from the text and the email that they knew? Not only was it a dumpster fire, but they were doing something wrong. If you don't believe me check it out, because it's all in there top leaders scrambling to address issues they hadn't first seen just weeks earlier. This is the part when i give you that little warning of your like, if you have anger issues and your blood boiling, this is it lucas, moskowitz, deputy general counsel and head of government affairs at rob and markets. That sounds good anyway.

Here's what he just said, robin hood made and waivers granted were generally the same decision requests and waivers made and granted by others in the industry. Coming back to that dtcc thing of the rules that we don't know of like how much money they have to have there and obviously they didn't have enough. Well, we know they were given waivers and didn't have the appropriate amount of money and they're saying. Well.

It's fine because other people were also not following the rules, so we should also not be able to follow the rules, even though we didn't have the money and clearly we were the weakest among all of them. It's all messed up. This is the part where it goes a little bit off the rails. We remain confident that we took the appropriate and responsible steps necessary to protect and support our customers.

Since then, we've made significant improvements to strengthen our foundation, have moved forward as a stronger company. Alongside our customers every step of the way you might be sitting there and be like support, our customers doesn't feel like you supported us at all. You took away the buy button you took money out of my pocket took money out of your pocket. How is that support customers, and then, when i was on stream today, someone pointed out well what, if by customers, they just mean citadel and yeah, it was probably a little tongue-in-cheek, but that actually makes the most sense.

Imagine if you just took the two times it says, customers here and just put in citadel steps necessary to protect and support citadel securities and then at the end, we move forward as a stronger company alongside citadel. Every step of the way makes a lot more sense. This is insane if you have the time, if you have the desire, i implore you to dive into this. I just wanted to give you the highlights once again, dave lauer is a great resource on all the things you need to know about it.

I will link everything important below just for posterity's sake at the point that i'm filming this video gme is trading at 130 and if you're, just interested in the current data set uh. The short interest is around 22 costs. To borrow a little bit closer to 36 shares on loan 21.3 million, so i just want to give all that just to see we'll see how this video ages with posterity, but one of the craziest things i think that's going on here - is check this out. Just a little thing to leave you with year-to-date gme, the stock that we were told was a waste of time, and no one should be touching.

It at all is down 14 13.75 to be very specific, but check out the overall market, the s p. 500. You know that thing that we're told to get for our 401ks, our rras, because that's a healthy thing we should all be investing in on the year. It is down 18, just a little bit of food for thought.

For all of you, that's what i have. I hope you enjoyed the video and i'll catch you in the next one.