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Pelosi On Threat To Lawmakers: "Enemy Is Within The House"; Man Arrested With Gun, 20 Rounds Of Ammo Near U.S. Capitol; Robinhood CEO On Controversy After GameStop Stock Chaos. Aired 9-10p ET
Aired January 28, 2021 - 21:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SHIMON PROKUPECZ, CNN CRIME AND JUSTICE CORRESPONDENT: As they start going home, and in weekends, and things like that, there is a lot of concern over their safety. So, they're trying to work with them to see what ways they could perhaps, law enforcement, how they could step up security for some of these lawmakers, Anderson.
ANDERSON COOPER, CNN HOST: All right, Shimon Prokupecz, appreciate it.
The news continues. Let's hand it over to Chris for "CUOMO PRIME TIME." Chris?
CHRIS CUOMO, CNN HOST: All right, Anderson, I appreciate it very much.
I am Chris Cuomo and welcome to PRIME TIME.
Now, you're going to see something here tonight that you won't see anywhere else, all right? You've heard about what happened with Reddit and GameStop? OK. We have the people on both sides of this story, OK?
We have the man who created the Reddit forum that led to the GameStop saga, and the CEO of the app, Robinhood, which created a new firestorm today. How? I'll tell you.
It is going to be something that united AOC and Senator Ted Cruz against that organization and him. Amazing, they finally agree on something! What can it be? We'll take you inside why.
But here's our main story. "The enemy is within!" Nancy Pelosi, Speaker of the House, saying Democrats are threatened by a cult of chaos, rising within the ranks of the GOP, listen.
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REP. NANCY PELOSI (D-CA): We will probably need a supplemental for more security for Members when the enemy is within the House of Representatives.
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CUOMO: It is a Party at war with itself. And the leaders now seem to have no control. The proof, you have the main Republican in the House, Kevin McCarthy.
He told his Caucus to get along. The next day, upstart Congressman Matt Gaetz went to the home state of Liz Cheney, number three in the Caucus, and attacked her personally.
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REP. MATT GAETZ (R-FL): If you want to prove that you have the power, defeat Liz Cheney in this upcoming election.
GAETZ: And Wyoming will bring Washington to its knees.
GAETZ: Maybe we ought to fight the neocons at home so we don't have to fight them in Washington, D.C.
(CROWD CHEERS "YES!")
GAETZ: But that's the problem, isn't it, because the neocons are at home in Washington, D.C.
GAETZ: I had a chance to communicate with President Trump yesterday.
(CROWD CHEERS AND APPLAUSE)
GAETZ: He sends his love. He loves you all so much. And President Trump is going to keep fighting for this country with every breath that he has.
(CROWD CHEERS AND APPLAUSE)
(END VIDEO CLIP)
CUOMO: Now, I wanted you to hear that last part. Two reasons there. One, he's going after his own, and two, you heard why. Now, hold that thought. Remember, it's not just Gaetz.
This QAnon kook actually got elected to the House, in Georgia, right, from Georgia, Members were quick to call her an aberration. McCarthy said he would have a private meeting with her to talk about these extreme QAnon views, right, that she'd change. He just put her on a key committee.
Remember who this person is, Marjorie Taylor Greene. This is her chasing down a Parkland school shooting survivor.
(VIDEO - MARJORIE TAYLOR GREENE CONFRONTING PARKLAND SHOOTING SURVIVOR)
CUOMO: She believes Parkland was a "False flag" event, FYI, meaning it wasn't what we thought it was, Newtown also, where all those kids were killed. She goes after this kid, telling him she has a gun with her. But then,
when a reporter tries to ask her a question, he's threatened with arrest. She's now scrubbing her social media. But CNN found a post, where she once supporting - supported shooting Nancy Pelosi.
So, you have your answer. The war in the GOP is over. And we know what won. Worse won, because Gaetz, as you heard, he doesn't take orders from the leadership. He takes orders from the same man, who said that QAnon Congresswoman was a future leader in the GOP. You know who that is? This guy.
And here's more proof that it's over. Kevin McCarthy flew down to kiss the ring of the man he criticized for stoking the insurrection on January 6th. Why do you think? Because they are doubling down on the division.
It's over. That's what it's going to be about. And you have to prepare yourself for that, and the Democrats have to figure out what to do with it. Biden too. Because it's the same thing in the Senate.
McConnell pulled that bait-and-switch, right? He proved his undying loyalty to the king, right? He voted to dismiss the trial after begging for time to give the trial its due. After saying Trump provoked the mob, and fed them, lies, why would he make that reversal? Now you know why.
It's over. They're not about character. They're not about law and order. They are about following the law of what Trump orders. They won't even call out any of the extreme-Right groups by name.
Some members, like this Greene, and others, want to bring guns on the floor of Congress, don't want to submit themselves to metal detectors, and have threatened violence on other Members of Congress, according to Pelosi.
Here's what we know for sure. The Acting Capitol Police Chief has just called for permanent fencing around the Capitol, post-insurrection. Can you believe this? Are the people safe inside? Are they safe from one another? What does that mean for us?
We finally have a President, taking aim at the pandemic, and related problems, but what can get done on the pandemic, in the midst of pandemonium?
Let's bring in the better minds. David Gregory and Governor John Kasich join me now.
Gov., not an easy assessment to hear of your Party, but what do I have wrong? I mean, all of the dots seem to connect into this kind of--
JOHN KASICH, CNN SENIOR POLITICAL COMMENTATOR: Well and - yes.
CUOMO: --deal of disruption. KASICH: I got to say - I'd say the only thing you may have wrong is there is a remnant of normal people in the Republican Party, who aren't buying into this.
But Chris, the situation is, is that the Republican leadership has really gone along in fostering these lies, these conspiracies. "The election was stolen," you know? Even that in and of itself is enough to say.
So what has to happen in order to wake people up is the Republicans, in a clear voice, have to say, "We lost the election," you know, plain and simple.
And then there are people in the Party right now - and frankly, Trump was a false prophet, Chris. He was a false prophet. And what he told people, the people who go paycheck-to-paycheck, whose kids are not doing well, whose jobs are at risk, he's telling them, "Well I'll fix all this."
And those folks, you're not going to - you've got to give them ideas, and it'd give them some hope, because much of this is about desperation, conspiracies. But I've got to hold the leadership and the Party accountable for this, because they continued to foster untruths, not untruths, they foster lies and misinformation.
And people out here, some of whom are desperate, are willing to latch on to anything, and that's how Trump became the false prophet.
CUOMO: Well, he still seems to be in control of the flock.
So now, David, let's just flip the analysis for a second. What are Biden and the Democrats to do?
Because, look, I've been very open. I thought cutting a deal with McConnell for any kind of power-sharing, even having the discussion, was a mistake. And yet, Biden says he wants things done in bipartisan fashion. Kasich says there are good-faith Republicans there. You hear that from Democratic senators as well.
So, do they try to get a deal on the pandemic? Or do they go full Trump themselves, and just force it down, through reconciliation, and not even try work with them?
DAVID GREGORY, CNN POLITICAL ANALYST: Look, it's going to be - it's going to be both.
I think Biden wants to try. I think he wants to go for big deals, big pandemic package, in response, and only as a last resort will he go to reconciliation. And I think he will. I think he wants to move very, very quickly.
CUOMO: But he won't get a big deal.
GREGORY: He knows he has kind of limited time.
CUOMO: Even with a handful of Republicans. He could get a piecemeal deal. I mean that's all the reporting that we have.
CUOMO: And from my sources as well. You can get key components done, vaccine financing, money for unemployed extension.
CUOMO: Money for people hard-up. But you're not going to get the $1.9 trillion.
GREGORY: Well and that's going to put him in a tough spot, because the need for money, for vaccine distribution, or to help schools get reopened, that is so vital. It may not be in the country's interest for him to hold out to try to get something bigger.
But I want to make a point about the Republicans, too. We don't know what the heart and soul of the Republican Party is right now.
What we know is that Trump still has a lot of influence, and we know that leaders in the House, like McCarthy, who want to be Speaker, are going to go kiss the ring, literally, for power, immediately. They want power in 2022, and maybe looking to 2024.
I think the future of the Republican Party may be different. And maybe the Governor's right, that it comes back to your rank and file Republicans and other conservatives, who try to figure out how they get back to some semblance of what they were.
What we don't know is how big that Trump base is now. There are a lot of Republicans, I agree with the Governor, who have left him. He couldn't get re-elected. He's a one-term president. He has power. We just don't know how big it is. We know there's plenty of enablers still.
I actually McConnell - I think a little differently about McConnell than you do, Chris. I think McConnell fired a flare, and was hopeful people would run toward it, other Republicans, and he was wrong. They didn't. And he decided to hang back.
CUOMO: Yes. That's called "Not leadership," right? Because leaders lead.
CUOMO: You vote the right way because that's the message you want to send. That's a flare. What he threw up was more like a match in a wind.
But I hear you. I hear the analysis on. In fact, I would even defer to you because you may not be the older brother, but you're the smarter one.
So Gov., you have McCarthy going down to see Trump. I mean that's not something--
KASICH: That's ridiculous.
CUOMO: --you do anyway, even when the president loses, and he was a good guy, you don't go and do that now, because it's a new administration. I mean, what do you say to Kevin McCarthy?
KASICH: It's atrocious. It's embarrassing. It's shameful. You don't see McConnell going down there. I agree with David. You're seeing something different out of McConnell than you see out of Kevin.
But going down there to Florida, all in the name of power, power politics, all in the name of reinforcing a false prophet, who misled people, many people, who were desperate, and not only just poor people, but people who think the system has worked against them.
And Trump was out there telling them, "I've got all the answers." That's to some degree why they won't let go. And also, because the notion that this was stolen, that the Democrats are about to destroy America, as we know it, that is still alive.
One thing about Biden, Chris that I will say to you, he needs to try to get a package that is critical, in terms of the things - some of the things that David has talked about, the unemployment, the pandemic relief, the things that are really critical.
And if I were him, or advising him, I would tell him to meet with some of these Republicans. There were five of them, the other day, who voted the right way. Try to make some of it bipartisan and be reasonable. Now, because you've got to give a little bit to get - to get something.
And if they will not cooperate, then you'll have no choice. And then he should use the bully pulpit to say, "The Republicans don't want to do anything." But you have to make that effort. Because remember, Chris, it's not all - the critical aid for the pandemic relief is vital for America.
KASICH: But he's got a lot of other things he's talking about.
And remember, he said he was fighting to fix the soul of America. So that sort of is bigger, bigger than a lot of these issues that we can talk about on climate - not that - climate's critical, I agree with all that.
But he's also fighting for something that goes over the top of all of it, and that is to restore the soul of America. And Republicans have to help him by telling the truth.
CUOMO: No. They're not happening.
KASICH: And leaders have to emerge, who will tell the truth.
CUOMO: You know? There is one bad fact I want the audience, David, to remember. It is my understanding that there's a billion dollars that has been spoken for, by Congress, but has not been apportioned yet. It hasn't been spent. And that's going to be a problem again.
It was problem last time. It's problem this time. There's still a billion dollars that they voted to spend that they haven't. And that's going to be something that the Biden administration's going to have to figure out.
But you know what? The Governor's kind of right, but ordinarily, what's going on in the opposing party isn't your problem. But it is Biden's problem.
CUOMO: Because all of this is a distraction from what he wants to be focusing on.
GREGORY: Right. And the real problem in Republican circles, right now, is that Trumpism is - has become this lie. It's become an attack on our elections. It's become this big lie that the election was stolen.
Matt Gaetz talking about taking on neoconservatives, and all that, the truth is there is an argument.
There is an argument over trade, over jobs, over training, over China, over Americans' - America's projection of power in the world. But Trump forfeited that conversation of consequence, when he decided to act like an authoritarian president, and to launch an attack on another branch of government.
And so McCarthy and Gaetz and others who are engaged in all of that are not - are having an untruthful conversation. But Biden has to deal with that Republican Party that is still showing majority saying Trump should rerun, should run again in 2024.
So, he doesn't know who to deal with because the other Republicans are happy, to take him on, on spending, or to take him on, on the woke- left, or the cancel culture. So, he's got the two schisms, the two parts of the Republican Party, coming at him, at a time when he's got limited time to do something big.
And he has to ask himself what you're asking, which is what's the incentive of the other side to really join hands with me, to achieve big things here, rather than just wait for this next election cycle, which began yesterday?
CUOMO: David's key word, Gov.
KASICH: Hey, Chris?
CUOMO: Last word to you, Governor.
CUOMO: But the key word with David--
KASICH: Yes, let me just let me--
CUOMO: --is "Big." Biden has to deliver--
KASICH: Let me - let me--
CUOMO: --big things to make his Party and his constituency happy. How does he do that with this climate?
KASICH: Well let's fix the country, and let's focus. So, you make a little compromise here with the Republicans, and try to get something that we can all agree is critical.
And I want to also tell you, Chris, if the Republicans don't start to talk about these ideas, and their solutions, a number of the ones that David just mentioned, in my opinion, the Republican Party will cease to exist.
One final point. In politics, you need to take the heat. It's not about re-election. It's about what you stand for. We put up a flare? No, don't just put up a flare. Seize the high moral ground. That's what politics is about.
That's what leaders are about. They are the ones that say, "Let it come! Bring it on, and I'm going to withstand it. And in the end, the truth shall win." We need more of that out of, well frankly, out of everybody in politics today.
CUOMO: Well, I would define "Everybody" as everybody in your Party right now, because I've never seen the GOP in the situation that it's in right now.
KASICH: Yes, yes.
CUOMO: David Gregory, thank you.
KASICH: I agree. But thank you. Thank you, Chris.
CUOMO: I'll give you the last word Gov. I can't catch you mid-breath like that.
KASICH: Well look, you can't just - look, there are people on the hard-left of the Democratic Party, who are just vicious attackers. And they need to cool their rhetoric.
CUOMO: Yes. But they didn't start an insurrection on the U.S. Capitol, and then refuse to name the groups.
KASICH: No, I didn't say they--
CUOMO: And do anything about it.
CUOMO: It's, you know, it's not a-- KASICH: When you're--
CUOMO: --both sides situation here, Gov.
KASICH: Oh, I'm - no, no, no. I'm not trying to compare them exactly. But what I'm saying is when you sit around the table at home, and the argument starts with brother, and mom, and sister, and everybody else, you can't have one side continuing to do things that light a flare on the other side.
CUOMO: No, I hear you.
KASICH: It's not.
CUOMO: But you know how I end it at my table right now?
KASICH: That's all I'm trying to say.
CUOMO: Here's how I end it. "You tell me why your Party isn't saying that these groups are terrorists, and they don't want any part of them, and why are they not saying"--
KASICH: I think they're dead-wrong.
CUOMO: --"that Trump should be held accountable." And when the silence comes, I say, "Good!"
KASICH: I think--
CUOMO: "Now shut up and eat!"
KASICH: No. It's--
CUOMO: Now, listen, I got to go. Gov.?
KASICH: Chris, they're dead-wrong. And they should be - they should be calling him out. And they shouldn't be visiting him in Florida. It's wrong. It's dead-wrong. And the lies are wrong. And they got to get on the right road, or they'd continue to damage our country.
CUOMO: They're picking up speed but not in the right direction. David Gregory, thank you. Governor Kasich, thank you times three. All right.
GREGORY: Thank you.
CUOMO: You saw the one thing that brought AOC and Ted Cruz together, OK? They do not like each other. AOC says she won't even work with him on this, by the way. But it is outrage at the Robinhood app's stock block, as they call it, in the middle of this GameStop controversy.
Why does this matter so much? Because it's about the big guy against the little guy, and it looks like the system was rigged in a place that's called Robinhood that's supposed to be for the little guy to help the big guy.
Is that so? The CEO of Robinhood joins me live along with the Creator of WallStreetBets. Is it confusing? Yes. But it certainly can be made understandable. I will lay it out for you. And then we are going to take it up with both sides.
But first, the terror threat that is hovering over Washington is not a theory. It's not hypothetical. We've had two arrests near the Capitol in the last 36 hours.
Andrew McCabe on the race to stop another deadly assault, next.
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CUOMO: You have to get your mind around the reality that nothing is over, all right? Once they open this Pandora's box of allowing hateful people to start recruiting within the traditional political ranks of unrest, we were going to have problems for a long time to come.
New arrests, more than three weeks, after the attempted coup, at the Capitol, the most, recent ones, today, in Missouri and New York. But those all stem from January 6th.
There are still problems, fresh ones. Tonight, the Feds are more worried about what could be coming, as we reported from that new DHS domestic terror bulletin. And they may have just gotten a taste of that.
Police say a West Virginia man was arrested near the Capitol, Wednesday. He had a handgun, 20 rounds of ammo, a list of lawmakers, and "Stop the Steal" paperwork. OK?
Whether or not he had what it took to carry out the threat or not in his mind, in his mentality, we'll see. But the message is clear. He told detectives he was concerned about the honesty and integrity of the election.
There was another man arrested today. He tried to get around a security checkpoint and fought with the officers.
Let's bring in Andrew McCabe.
Where do you draw the line between, "OK, these are one-off guys, who are not in full control of themselves," versus, "No, this is extremism that is going to be planned, and acted on, lone wolf, or in combination?"
ANDREW MCCABE, CNN SENIOR LAW ENFORCEMENT ANALYST, FORMER DEPUTY DIRECTOR, FBI: Chris, you've always had your one-off people, who approach the security checkpoint, and feel like they want to get inside for whatever reason, and cause a ruckus. And sometimes, those things even end violently. That's normal business in securing the Capitol or the White House or what have you.
This is different. What makes it different is each one of these individuals is carrying with them some evidence, some indication that they are responding to the big lie.
So, your 71-year-old gentleman from West Virginia is carrying documents that are reiterating the "Stop the steal" thing.
You have the guy who was arrested in California, a day or two days ago, with five pipe bombs in his house, he's also got all kinds of rhetoric on his social media feeds and other places about his kind of rabid support for former president Trump, and his frustration about the election having been stolen.
So, what you're seeing is this ideology, perpetuated by President Trump, is uniting extremists of all stripes, under the flag of Trump. And that's what makes this threat from domestic extremists particularly dangerous.
CUOMO: One more thing. How big a deal is it that the extremists can look and see a QAnon member in Congress, even if it's just one?
If they can point to the fact that, "Hey, they don't even say our names. They don't even accuse us of anything, within the Republican ranks. They won't even try Trump for this. They don't believe any of this," does that just play as politics? Or does it have signaling value? Because we've never had that before, Andrew. We've never had something that you guys were worried about--
CUOMO: --on the DoJ side, being ignored by our politicians.
MCCABE: That's right. These folks have been marginalized for decades.
And all of a sudden, out of nowhere, they're being authenticated. They're being held up. They're being validated by the President of the United States, by United States Representatives to Congress. You can't overstate the significance of that sort of acknowledgement.
This is a group of people, particularly the QAnon folks, who they look for codes in - written on the side of a milk jug. I mean, they are really focused on interpreting things in the direction that they prefer.
So, when they see someone like a Marjorie Taylor Greene espousing these theories, and then getting rewarded with a prime spot, on a congressional committee, like that's a very significant signal to them that they're doing the right thing, they're on the side of the right, and it causes them to keep going forward.
CUOMO: What does it mean for them to see McCarthy with Trump, and to hear people saying that they won't even try Trump for what happened?
MCCABE: If I'm them, what I'm hearing, from looking at that picture today, of Trump, and McCarthy, and Mar-a-Lago, the message they get is, "It's not over. Continue. Move forward. You still have the support. The President is still out there. He's pulling for you. McCarthy and the Republican side of the Congress that he represents is still on your side."
And that is enough to breathe new life into their movement, and to put some wind behind their sails, and to keep these insane plans moving forward.
CUOMO: How worried are the brothers and sisters, who are still on the job about what's to come?
MCCABE: Yes, very, very. You can put people in jail, when you build a case, and you have evidence.
In this case, many, many people, right, from the Capitol attack, you can identify them, do the hard work, of finding them, building the cases. But you cannot stop an ideology, and that's what this has become.
It's become a political, violent ideology. And we are going to be dealing with the outcome from this for many, many years. You're not going to be able to put Pandora back in the box very soon--
CUOMO: The only thing that's really slowed these guys down is one of their leaders from the Proud Boys being identified as a CI, as a confidential informant. I mean that's the only check on their enthusiasm they've had. Not a good sign!
Andrew McCabe, thank you, for giving us the straight talk on this. All right?
MCCABE: Thanks, Chris.
So, we have this pandemonium, this poison, in our culture, all on top of a pandemic. One of the most contagious variants of COVID overseas is now in the United States. That means it's going to spread, OK? How will it impact the fight?
And what is the deal with two masks, OK? I know it's out there. I think it's about politics. But I'm going to give you the straight information from Dr. Sanjay Gupta. He's got answers for you, next.
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CUOMO: It's beyond sad that after all this death, we still don't get it with masks. We're still being begged to wear a mask.
There's still more people, on the Right, who want to chase people around, like me, and say, "Look, he didn't have it on the whole time," than encourage you to wear it. It's become political, and it's literally made us sick, worse than so many places in the world that we should be in front of and above.
Now we're seeing the new manifestation of this. Are two masks better than one? Here to answer that for us, Chief Doctor Sanjay Gupta.
Doctor, always a pleasure. Appreciate you being with us.
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Great to be here.
CUOMO: Let's talk masks. What's all this drama about? What do we know about one mask, two masks? What's the guidance? CDC says, "Wear a mask."
CUOMO: What are we supposed to think about multiple masks?
GUPTA: Well I think it's a very worthy discussion, Chris. I mean it feels like the discussion we had, spring of last year, where it was masks or no masks.
And now, it's a question of what's the best mask? Not all masks are created equal. And this is against the backdrop of these variants, these new variants that are more transmissible.
I'll tell you what I'm hearing, talking to a lot of people about this. Scott Gottlieb, former FDA Commissioner has written about this. But there's this increasing sort of drumbeat of people saying, "Look, if you're going to be in the situations, where you could potentially be exposed, you should have the best protection possible."
What is the best protection possible? Probably something like this, this is an N95 mask. Why is it so good?
CUOMO: That's a beauty!
GUPTA: Fits - yes, it's not the best color, but it fits really well. CUOMO: But it's got the double band, I mean, that's top notch.
GUPTA: It fits around, gets you the fit. It's also these have electrostatic fibers in here.
GUPTA: And the reason that's important, it's kind of like your blanket in the dryer, catches all the socks, these help catch the viral particles. 95 percent protective, you know?
CUOMO: And you've got the fit clip, on the top of it, which is nice, when you have a delicate nose like yours.
GUPTA: Exactly. And it does give you that fit. You breathe in. You feel it sort of actually give you the fit. Some people say they're too uncomfortable. You're not saying "Wear it all the time." But if you go to a place, where you're going to be around a lot of other people, people say the N95 mask is the best bet.
Abraar Karan, who's at Harvard, says if the country did this for four weeks, we could essentially end the pandemic.
GUPTA: It's extraordinary statement. But that's what he's saying.
Lot of people say, "You can't get the N95 mask." That's true. They're hard to get. KN95 masks, made out of China, now have Emergency Use Authorization in this country, very similar, similar, sort of, electrostatic fiber, similar protection.
But that's what the discussion is, Chris. If you're going to wear a mask, shouldn't you be wearing the best mask possible, especially in high-risk situations?
CUOMO: It reeks of politics and a political football to me. And I'll tell you why, because they were so anxious to crush Fauci about this. And I know, and you know, and anybody who wants to check the record can know, Tony Fauci never said, "Wear two masks."
CUOMO: He said, "Wear a mask." And somebody asked him about wearing two masks, he says, "If you want to wear two masks, wear two masks."
And it reeks of this being a political football. Fauci never said, "Wear two masks." The guidance is to wear one. The compliance in the country is maybe at around 50 percent, when we need it to be at 90 percent. Is this just politics playing a role here again?
GUPTA: I think, unfortunately, it probably is. And it's tough to disentangle anything completely from politics right now. I think what also happens, Chris, is that sometimes you have a certain
situation, and then you justify the situation. "We don't have enough N95 masks, therefore, let's not recommend them."
We could have been in a very different position. This was a big topic for Rick Bright, you may remember, as a whistleblower, saying, "Hey, we need to be making tons of N95 masks. Everyone needs to have them." The country didn't do that. And so, we still don't have enough masks.
I get this one from the hospital. I can only get a new one, if it gets ruined, or soiled, or something like that. That's when I can get a new one. There's simply not enough anymore.
GUPTA: But I do think the KN95 masks from China can play an important role and we need to make more of them, as opposed to saying, "We don't have enough, so let's not recommend them." The answer is we should make more.
CUOMO: So, the numbers are starting to come down in cases.
CUOMO: And now, we start getting the variants. And it raises a question that people don't want to ask, let alone answer, which is, are these variants going to force - should we expect lockdowns?
Because if they spread so much more quickly, and we know we don't have the mask compliance we need, is it going to change the case rate, and require some type of more extreme measure?
GUPTA: You're right. No one wants to hear this, Chris. And I feel like I look at the data, and understand what is happening in other countries.
We talked to Clarissa Ward in the U.K. yesterday. I mean it's a dire situation, as the transmissibility of the U.K. variant has really wreaked a lot of - a lot of transmissibility over there.
Let me show you the important sort of numbers here, if we have them. Basically, if something is more lethal, versus more contagious, play that out, play it out for a month.
A month is six generations. A generation is five days, right? That's sort of the average incubation period. What happens? After a month, after six generations, you get far more deaths from something being more contagious versus being more lethal. People need to let that sink in.
But basically, it's more contagious, therefore it's likely to spread to vulnerable populations, therefore encounters where you weren't likely to get infected before become higher-risk encounters, you know, grocery stores, whatever it may be. And that's how you get a much higher case fatality rate.
What causes shutdowns? People will see those numbers. But I can tell you what ultimately drives it is what's happening in hospitals.
You start to get hospitals that are simply overwhelmed. They have no more space. And they call the leaders, and they say, "Look, we've got no escape hatch here. You've got to - you've got to stop transmission."
And the most effective way to do that is to just basically stop people actually coming together in any way for a period of time. Who knows? I don't think the country's ready for it. I mean, like you said, they don't even wear masks. But that would be an effective strategy, at least for a period of time.
CUOMO: Quickly, do you think that we should expect a travel ban from South Africa, given the variants coming from there?
GUPTA: Look, I don't know. I don't know - I don't know what's going to happen.
But I'm not sure it's a good idea if it does, and here's why. Two cases, in South Carolina, already. No known travel history, no known connection. They were tested a few weeks ago. So, the likelihood is that there are far more cases here already.
CUOMO: It's too late.
GUPTA: Yes. U.K. variant, one month, tomorrow will be one month since the first case was diagnosed of the U.K. variant, it's now in 30 states around the country. So, it spreads really quickly.
Also, with the travel ban, you and I were sitting on the set together, when they announced travel ban in Europe. What's the first thing people did? They all started coming back. So, you get the - you get the significant influx, which could at least acutely even worsen the problem.
CUOMO: It's amazing how America has made her own problems in this situation. Sanjay, thank you very much, brother, appreciate you.
GUPTA: All right, any time.
CUOMO: All right, our appreciation to Sanjay Gupta as always.
So, by popular demand, all of you guys were asking me questions about the GameStop situation and the Reddit and "Did you see it?" and Robinhood, and what's going on, power to the people, the little guy found a way to beat the big guy, and then uh-oh, the game got twisted.
So, why is everybody talking about the stock of this struggling video game store? GameStop, if you've got kids, you've heard of it. But if you don't, or if you're young, and you don't game, maybe you didn't.
So, the question becomes, how did this army of Redditors shake up the market by betting against it? Why are Members of Congress, who agree on almost nothing, uniting on this?
We did the research. We have the story. And we have the two key figures in the drama. You will not want to miss this. Next.
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CUOMO: OK. We had an extraordinary shift, unfolding in front of our eyes. Individuals started banding together, taking on establishment politics, and exposing a broken system.
The result was a seismic fluctuation more volatile than the stock prices of GameStop, AMC Theatres, or Bed Bath & Beyond, stocks that by traditional measures should be in trouble, especially amid the pandemic.
Malls, movie theaters, not exactly busy places these days, right? That's why big money-movers, like hedge funds, started shorting those stocks, shorting just means betting on them to fail.
A community on the website Reddit called "WallStreetBets," they reacted by starting to buy up the stock. They did it so much that GameStop started the day up 25 percent - 2,500 percent - 2,500 percent up from a year ago, OK?
That leads to stories like a line cook watching his $4,000 investment become $67,000, a pastor who made $1,700 in a week. Meanwhile, the move was a major blow to major hedge funds, some needing multi-billion dollar infusions to stay afloat.
We don't know how this ends. But we know, for too long, the hedge funds are the ones that get the big bailouts, right? The big banks get the big help. The little guy doesn't. And that's what this story feels like.
So, if you want to understand the power of the moment, you have to look at the political forces aligned on this one, AOC, Ted Cruz, Elizabeth Warren, and Donald Trump Jr. I don't even know why we included him, but they're all on the same side.
Honestly, I don't know why I included him. The guy's not a politician. He just says inflammatory things to help his father and his own brand. Anyway! That power is fueled by anger, something both sides of our political
divide want to harness these days, it seems. In this case, the anger is targeted at a system too long off-limits to those without means.
The little guy loses and the big guy gets richer, a reality as obvious as our huge and growing wealth gap, right? You all know the story of this country right now. We're waiting for somebody to somehow figure out a way to make it more equitable, more fair.
We stand witness to a storm of people taking their shot, targeting the hedge funds they see, as having the advantage, the rise of no-fee trading due to the popularity of online brokers like Robinhood provided access.
In a way, it helped democratize investing, because it let people bypass traditional commission fees. Groups like "WallStreetBets" provided the numbers, and the community, to unite the effort.
The outcry when companies like Robinhood and Ameritrade imposed restrictions today just shows the fury that exists behind what for far too many is still the foreign world of Wall Street.
In the face of that fury, as well as a class-action suit, Robinhood will now resume some limited buying of stocks like GameStop and AMC. The question is why did they stop the trading?
Let's dig into the decision with Robinhood's CEO, Vlad Tenev.
Vlad, thank you for joining us.
VLADIMIR TENEV, CEO, ROBINHOOD: Chris, thank you for having me. This is surreal for me. I've been watching your show live, especially through this past year.
CUOMO: Well I appreciate it.
Look, you know my audience. This is not an investment show. And I don't think it needs to be. I don't really care about your capital commitments, your liquidity, and what was going on in the regulatory side. And I'll talk to you a little bit about that. But I want you to address the obvious.
CUOMO: This looks like a move by an outfit called Robinhood, which is supposed to be taking from the rich, and giving to the poor, and doing exactly the opposite that when the big guys, including one of your main investors, in your company, started to lose, you shut down the game, to starve the little guy. Fair criticism?
TENEV: That's not what it is at all. And I know you started this segment - it really resonated with me because you described the story of Robinhood.
Robinhood started five years ago by pioneering commission-free, no account minimum, mobile investing. And we've been the spokesperson of the individual investor.
And our whole goal, as an institution, is to enable those customers, empower them, and give them access to the markets, because for the longest time, markets have been only accessible to the wealthy. And so, the entire industry adopted our business model in 2019.
And in 2020, we added millions of new customers. The entire industry added millions of new customers, who took advantage of the market rally, and became investors, for the very first time. So, we had to make a very difficult decision, to protect our customers, and our firm.
TENEV: But we, in no way, do anything--
CUOMO: Why? Explain why you had to do it. If it wasn't to protect the guys, who had shorted the stocks, which are the big hedge funds, how are you helping the little-guy investors?
TENEV: Well, I know that there's rumors around that, you know, we were directed by market-makers or other market participants to do this. And I want to be 100 percent clear. This decision was not made on the direction of any market-maker or other market participants. This is a Robinhood decision.
CUOMO: So, why'd you do it?
TENEV: Robinhood, as a brokerage, has lots of financial requirements, SEC requirements. We have to put up money at clearinghouses. The amount of money that we have to put up depends on market volatility.
And we're in historic - we're in a historic situation, where there's a lot of activity, and a lot of buying concentrated, in a relatively small number of symbols that are going viral on social media. So, we haven't really seen anything like this before.
And to prudently manage the risk, and the deposit requirements, we had to restrict buying in these 13 stocks. But customers that held them could sell throughout. Thousands of other securities and stocks on our platform were available to freely trade.
And our number-one priority, as you mentioned, is to make sure our platform is reliable, stable for our customers. We're serving our customers and giving them the tools.
CUOMO: But that's exactly what's in question now.
TENEV: And we're doing everything in our power to turn it back on as soon as prudent.
CUOMO: But that's the thing is that the trust is in question because it seems like the only people who are getting hurt were the big shots. And that if they were benefiting from this, your small investors now believe that you wouldn't have shut down the game.
And just one thing without getting in the weeds here, you don't control the listing venue for GameStop. Now, I used to work in finance, so I know this stuff. But the audience doesn't need to. The New York Stock Exchange does. So, if anybody was going to control the listing, and shut it down, it should have been them, but it wasn't. It was you.
And the reason that they do it is very limited. They do it because they think there's evidence of fraud, or they think that there needs to be a material disclosure, by the company that hasn't been made. And that's done to protect the investor.
You checked none of those boxes here, because you don't control the venue. You didn't know about any information that GameStop or any of these other stocks needed to put out. You don't have any reason to believe there's fraud that you've articulated.
And you're certainly not protecting these people who've been living the dream of making money, especially at the expense of the big guys. So, why should people believe you did this for the right reasons?
TENEV: Well, we have no choice. We have to comply with all financial requirements and regulations.
CUOMO: The SEC hasn't said you had to do this.
TENEV: Well lots of brokers have to comply with these financial requirements and restrict - and issued restrictions on some of these names. And this is an industry-wide thing. You, yourself, mentioned that other brokers this week have imposed restrictions.
And not speaking for other firms, but for Robinhood, in particular, this isn't because there's deals happening with market-makers we route to or market participants. These are--
CUOMO: But then why did you allow people to keep selling but not buying? The reason, that is, so troubling to people, is that they were making money buying the stock because they were against the short side.
And so, by enabling them to sell, but not buy, it sounds like you were allowing the hedge funds and, again, one of them owns a piece of you, and they had a big short position, and that looks like a stinky conflict that you didn't come out straight on from the start. Address that.
TENEV: Well, none of that had anything to do with our decision to do this.
Again, this was just looking at regulatory requirements, financial requirements, and we 100 percent will always protect our customers, where the entire business is operating to empower individual investors and has been since its founding. And that's what Robinhood is committed to continue to do. So, we want - we don't want to restrict buying in these 13 stocks. We're doing the best we can to re-enable it as long as it's operationally and prudent from a deposit standpoint.
CUOMO: So, for you, it's about how much money is in the mix and what you can cover yourself?
TENEV: Well it's about us complying with the financial and clearinghouse deposits and regulations and--
CUOMO: Then you need - you know what you need? I'll give you some free advice.
You need somebody, who sets those requirements, to come out and say that this is why this happened, because otherwise, it smells bad, especially for a place called Robinhood, to have Citadel Securities, your largest customer, investing $2.75 billion to bail out one of the biggest losers in the GameStop short. You know, they both deny, you know, you and Citadel say this wasn't concerted action, or anything, but it looks terrible.
So, you need somebody to justify your decision. Do you think you can do that?
TENEV: There's a lot of misinformation out there, and I'm not going to speak for what regulators or industry professionals will say, but you can talk to any of the brokers that have made similar restrictions. And I think they'll all tell you the same thing.
And this is a highly-regulated industry. It's non-negotiable for us to cooperate with the regulators, follow their guidance. And we're in constant communication with them. So it's - we have to be extremely buttoned up here.
CUOMO: I heard you. And I saw you on--
TENEV: And we're--
CUOMO: --I saw you on another channel. They were saying "So, is it a liquidity issue? So, Robinhood didn't have the money to control the flow?" And you said "No, no, no, it's not the issue. We don't have a liquidity issue."
Well if you don't have a liquidity issue, but you say you're stopping the trading because you couldn't meet certain capital requirements, how does that reconcile with itself?
TENEV: Well, we feel pretty good about the situation and we did this pre-emptively, right? We had to - we were looking at the deposit requirements. We were looking at the operational requirements. So, we did this proactively. And we feel good about being able to re-enable these things.
And we definitely want to make sure customers understand when we impose restrictions, when we lift them. Ultimately, brokers have to impose these types of restrictions because the capital requirements can change.
And we're in unprecedented times. And the financial system operates in very technical ways with regard to settlement and money movement. And there's no way around that.
CUOMO: I hear you.
TENEV: It's just the reality of our business.
CUOMO: I hear what your rationale is. But, again, now we're going to be watching this story.
CUOMO: Because you have political forces, I've never seen aligned before, who want to make sure that the big guy's not finding a way to get over on the little guy, because the country, I think, has just about had it with that.
So, you're caught in the middle. And we'll be watching. And I hope you're acting in good faith, and that the trading resumes, and the market can settle itself.
But Vlad Tenev, thank you, for coming in and making the case for Robinhood.
TENEV: Thank you very much. And absolutely, we want nothing more than to enable investing and access to as many individuals as possible. That's our mission, and it's in the name of the company.
CUOMO: Just got to make sure that something named Robinhood isn't rigging it for the Sheriff of Nottingham. You know what I'm saying? Like if you're going to set it up, where the little guy can win, they should be able to play fairly, and see that happen.
I'll stay on it. And you have this as a venue, to discuss it, as we move along. Good luck!
The other side of the story--
TENEV: Thank you, Sir. Appreciate your time.
CUOMO: --is the individual investors, who came together, in places like Reddit, which is an amazing story in itself. The man who founded "WallStreetBets" is here. His name is Jaime Rogozinski. Rogozinski, a nice Irish name! He did step away from it last year. But he's here now.
And I saw you. And I know you're heated up about this, Mr. Rogozinski. So first, Jaime, what was your response to what you heard from the Head of Robinhood?
JAIME ROGOZINSKI, WALLSTREETBETS FOUNDER: Well thanks for having me. I just want to start by saying I hope you take it a little easier on me. I don't have as much experience as him.
I'm glad that I got to hear his answer. I was - I've been asked that question day in - all day long. And I've been left but to speculate. To me, it sounds like the same conclusion you were kind of getting to which is they - having a liquidity issue. I don't know enough about their profile internally.
My suspicions were that they were under pressure from regulators. That's the most logical step based on the fact that Robinhood caters to this very demographic that has made them so successful, doesn't make sense for them to turn their back on their customers. So, I'm glad that I got a logical explanation out of him.
CUOMO: Why is it logical? Because the investor side says, "Look, this is exactly what happens. You know, we find a way to finally compete, by basically crowdsourcing our own investment strategy, to compete with people, who have more money, to put into the market.
And, by the way, we're betting on us, by trying to hold these stocks up. And, yes, we're making money. But we're going against these big guys, who are just trying to take it. And now they stop the game, so that they can figure out a way to not lose so badly."
ROGOZINSKI: Yes that--
CUOMO: How are those people supposed to feel?
ROGOZINSKI: That's what I'm saying that I think they didn't really have a choice, and I buy into that. That's a logical thing. But these people have a right to be mad. I mean, these people are participants, and they deserve the same rights, as all the big players.
I think that part of the reason why this story has a feel-good component to it is because, yes, the little guys are getting together, and they're actually being able to unite, and be an opposing force, to these institutions that have historically dominated this invite-only market.
And so, they have a reason to be upset. The fact that now that they've finally been able to get a voice, and get the spotlight, they get the rug pulled from under them, so I understand the anger on their behalf.
CUOMO: The only other thing is I know you're not with it anymore.
But do you have any concerns that you're inherently getting people into a game that is not that much unlike gambling, and that the odds may be even for everybody who goes in, but not really, because of block trades, and the speed with which they can trade, and the idea of democratizing investing.
Is that a little misleading because of the nature of the game?
ROGOZINSKI: There is a new round of game. You're talking about the speed and then and there's more technical components, the execution of these trades. Robinhood is not known as necessarily being the best one. But these particular - the people that are coming into this type of trade, they don't care about those little things. They don't care if the other - the people that are behind these orders are front-running them. They don't care if--
CUOMO: I hear you. But what they care about is it being fair?