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Robinhood isn't owned by Citadel or anyone else. However, it has close financial relationships with many investment firms and Citadel is its largest trading partner by far - Robinhood routes more than half of its customer orders through them.Discussion in this Twitter thread says that Robinhood is owned by Citadel, one of the hedge funds that has a large short position in GME.
So there are most definitely conflict-of-interest and potential collusion questions to be answered here, given Citadel's hedge fund relationships.
That isn't what that letter says. Like, at all. It's asking for the SEC to report on exactly what happened, whether any illegal market manipulation occurred, to clarify what the rules are regarding illegal manipulation and to recommend rule changes if the situation warrants that. And that applies to the actions of anyone involved, not just regular, retail traders.Elizabeth Warren wants the SEC to investigate retail traders in the Reddit group that drove the price of Gamestop up, not the fat cats who were somehow able sell short more of the company's stock than actually exists.
Far from being an unreasonable intrusion, these are responsible questions for a member of the Senate banking committee to ask. Both she and the SEC have a responsibility to ensure that people can't illegally game the system and potentially cause the next catastrophic boom-bust bubble. Part of that responsibility necessarily involves figuring whether people did actually do that or not.