The climax of the farce passed, and the SEC began to tidy up the battlefield.
According to Bloomberg, the U.S. Securities and Exchange Commission (SEC) is investigating potential fraud and market manipulation in recent gem stock trading led by GME. The agency suspects that some members of the WallstreetBets forum, the "nest" of retail investors, are not amateur investors that people think, but professionals who are taking advantage of retail enthusiasm for profit.
Last week, the SEC said it would step in to investigate. On January 29, it said in a statement that it was closely monitoring the extreme market volatility that has occurred recently, saying that "when it proves that there is abuse or manipulation of trading activities prohibited by federal securities laws, it will take action to protect retail investors." At the time, the market saw it as a positive signal for WallStreetBets members and other retail investors, but now it seems that some of the "leaders" among retail investors are also one of the spearheads.
But for the SEC, that can be a tough job. Bloomberg has previously pointed out that it is difficult to prove that posts on forums are deliberately spreading false information or committing fraud, part of an illegal plan to manipulate the market.
As James Cox, a professor at Duke Law School, puts it, how is the difference between manipulating trades and making intuitive investments and sharing their "intuition" online legally?
At the same time, many voices are also calling on the US SEC to investigate brokerages such as Robinhood to restrict retail trading, and some politicians, such as Rep. Alexandria Ocasio-Cortez, Democrats of New York, are among the callers.
It is worth mentioning that the GME storm has attracted Yellen to personally move. On Tuesday, Reuters quoted a U.S. Treasury official as reporting that U.S. Treasury Secretary Janet Yellen will convene a meeting of top financial regulators this week to discuss market volatility caused by retail investors on GameStop and other stock exchanges.
The meeting is expected to take place as early as Thursday this week and will be attended by the heads of the U.S. Securities and Exchange Commission (SEC), the Federal Reserve, the Federal Reserve Bank of New York and the Commodity Futures Trading Commission, the official said.
After a week of soaring 400 percent in shares, GME plunged two consecutive times this week, closing up 2.68 percent on Wednesday, a long-lost "quiet" day; AMC, BlackBerry, Nokia and others also returned to a more moderate trend on Wednesday.
But regulator officials said non-bank institutions were playing a growing role in financial markets, and the event could accelerate regulatory scrutiny of such institutions.
For more information, please read the relevant VIP article:
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