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The country’s chief financial regulator says it is reviewing closely “the extreme price volatility of certain stock prices in recent days. It has also reassured the public that officials are willing to take action if they determine that market manipulation is involved.
The U.S. Securities and Exchange Commission made the announcement Friday, in the wake of the Reddit-fueled stock surges that have plagued Wall Street in recent days. While the SEC statement did not identify specific companies involved in the saga, it is clear the agency was referring to the frenzy surrounding GameStop and AMC, which experienced significant, unexpected spikes in market prices.
“… We will act to protect retail investors when the facts demonstrate abusive or manipulative trading activities prohibited by federal securities laws. Market participants must be careful to avoid such activities,” the SEC statement said in part. Similarly, issuers must ensure compliance with federal securities laws for any contemplated offers or sales of their own securities. The Commission will continue our work on behalf of investors and the markets. structure and operation of our securities markets. “
GameStop made headlines this week after it started posting massive gains in the stock market, trading as high as $ 483 a share on Thursday. The increase was attributed to a group Reddit users who started buying shares of high short companies such as GameStop and AMC, as well as Blackberry and Bed, Bath & Beyond. The rally, seemingly coordinated on the WallStreetBets sub-Reddit, was a huge blow to short sellers and investment firms known to take short positions. So much so have a number of Wall Street elites called for tougher regulations to prevent similar events.
Trading platform Robinhood was also accused of market manipulation this week after it introduced trading restrictions on more than 50 stocks, including GameStop. The SEC seemingly addressed this controversy in Friday’s statement, “The Commission will closely monitor measures taken by regulated entities that may disadvantage investors or otherwise unnecessarily monitor their ability to trade certain securities.”
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