The The U.S. Securities and Exchange Commission, under heavy pressure to respond to the recent stock market mania, said it was trying to identify potential misconduct and will investigate. on bankruptcy decisions to stop buying prompted an investor revolution.
“The Commission is working closely with our regulatory partners, both across government and at Finra and other self-governing bodies, including the stock exchanges, to ensure that Regulated bodies uphold their responsibilities to protect investors and to identify and pursue potential crimes, ”Allison Lee, the group’s acting chair, and its commissioners said on Friday recitation.
In its statement, the SEC leadership said the regulator will “closely review actions taken by regulated bodies that could disadvantage investors or mislead them. -competent on their ability to trade certain securities. ”
The comments were still the most aggressive from the top Wall Street regulator after a week-long frenzy that saw short-term investors using social media to soar. Corp GameStop, AMC Entertainment Holdings Inc. and other stocks, hedge funds are crushed by their short bets and Robinhood Markets and other breakouts are restricting trading in the tight securities.
The unrest has shaken the financial industry and prompted calls from both Capitol Hill Democrats and Republicans for the SEC to take action. The outbreak reached a fever zone yesterday, with lawyers expressing anger that investors have been prevented from adding to their bullish GameStop positions. Many said they suspected the move was made to help hedge funds, a claim that denied breaches.
Robinhood has been at the heart of much of the uproar, as it was the preferred trading platform for the army of investors who have gathered on Reddit message boards to hype up GameStop and AMC . Robinhood imposed a temporary restriction on the purchase of these shares on Thursday, much to the chagrin of the buyers. It was also seeking more than $ 1 billion in surplus cash after the stock market’s main clearinghouse demanded large collateral sums from bankruptcies.
The highly complex nature of the stock market and the lengthy process for writing new rules means that any SEC regulatory changes are likely to be a way off. However, the agency has great power to influence market behavior by opening investigations, fining or banning those accused of committing a crime and using the pulpit. bully to give warnings – as he did on Friday.
Following a possible manipulation of stock prices, the SEC said it would focus on “protecting retail investors. He warned that market participants should “be careful to avoid” illegal schemas.
Some of the most common are “pump-and-dumps,” in which traders lure others into buying and then dumping their shares at the high price. However, such cases can be difficult for the SEC to ascertain because they usually bend to the agency indicating that knowing investors are spreading false information in order to trick others into buying or selling stock.
(Add the background beginning in the third paragraph.)