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The next Sheriff of Wall Street has just fired a shot across the bow of popular fee trading app Robinhood.

Speaking at a Senate Banking Committee confirmation hearing Tuesday, Gary Gensler said that if he were confirmed as President Joe Biden’s Securities and Exchange Commission chief he would “study” Robinhood’s business model in the wake of criticisms of its handling of the so-called “Reddit rally.”

“What does it mean when balloons and confetti are dropping and you have behavioral prompts to do more transactions on what appears to be a free trading app?” Gensler asked rhetorically. “I think we’re going to study that and look at it.”

Gensler made the comment when asked about the popular no-fee trading app’s role in a January rally that had small investors driving stocks like GameStop to nosebleed prices before freezing trading on those stocks and causing them to plummet.

Gensler’s comment that Robinhood “appears to be a free trading app” is an apparent reference to the app’s practice of getting paid to sell its trade execution to market makers like Citadel Securities, which critics say creates a perverse incentive for it to push customers to make more transactions.

Gensler added that his SEC would “ensure that customers still get best execution in the face of payment for order flow.”

Gary Gensler made the comment when asked about the popular no-fee trading app's role in January's GameStop rally.
Gary Gensler made the comment when asked about the popular no-fee trading app’s role in January’s GameStop rally.
SOPA Images/LightRocket via Gett

The 63-year nominee— a former Goldman Sachs executive-turned-financial regulator — is widely expected to be confirmed to the role and stands to be an aggressive enforcer. He was previously head of the Commodity Futures Trading Commission under Obama where he became a thorn in the side of his former Wall Street colleagues by overhauling the regulation of derivatives that created the 2008 financial crisis.

He also told the committee his SEC would push public firms to share their activity on environmental, social, and corporate governance issues.

Gensler, who currently teaches a class on cryptocurrencies at MIT, also backed more use of Blockchain technology in financial regulation, telling the committee that he sees the digital ledger as “a catalyst for change in many areas.”

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