Connect with us


SEC To Investigate Trading Platforms That Blocked Users From Purchasing Stocks After Reddit-Driven GameStop Surge



The Securities and Exchange Commission (SEC) said Friday that it will launch an investigation into several online trading platforms that blocked users from purchasing highly volatile stocks after a recent Reddit-fueled trading frenzy in GameStop stocks.

The purchase frenzy came after Members of the Reddit forum r/WallStreetBets poured money into buying shares of GameStop, theater chain AMC, Nokia, BlackBerry and other companies heavily shorted by hedge funds. The trading surge sent the stocks into a rollercoaster, whipsawing between unthinkable heights and severe losses, alarming the financial world and capturing the attention of Congress.

The SEC said it was “monitoring the volatile trading volume and reviewing actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities.”

Acting SEC Chairwoman Allison Herren Lee and Commissioners Elad Roisman, Hester Peirce and Caroline Crenshaw released a joint statement saying: “Our core market infrastructure has proven resilient under the weight of this week’s extraordinary trading volumes. Nevertheless, extreme stock price volatility has the potential to expose investors to rapid and severe losses and undermine market confidence.”

The commissioners added: “As always, the Commission will work to protect investors, to maintain fair, orderly, and efficient markets, and to facilitate capital formation,”

Wall Street has urged the SEC to probe whether their coordinated effort violated any market manipulation laws. Their defenders argue that the amateur band of day traders is simply beating Wall Street at its own game.

Click to comment

You must be logged in to post a comment Login

Leave a Reply


Shop Smart