Within the Home, Rep. Maxine Waters, who chairs the Home Monetary Providers Committee, mentioned she additionally meant to carry a listening to. “As a primary step in reining in these abusive practices, I’ll convene a listening to to look at the current exercise round GameStop (GME) inventory and different impacted shares with a concentrate on quick promoting, on-line buying and selling platforms, gamification and their systemic influence on our capital markets and retail buyers,” she mentioned in a statement.
Information of the hearings comes after Robinhood was hit with a class action lawsuit after it restricted customers — greater than half of whom own GameStop stock — from buying and selling on Thursday. The corporate mentioned in an replace it would resume “restricted buys of those securities” starting Friday.
Individually, Fox Enterprise reported that Robinhood was anticipating an SEC investigation that “entails market manipulation.” “The SEC by some means goes and appears on the Reddit boards and tries to determine who’s hyping what, who’s touting what, and perhaps kind of hyperlink it with trades,” Fox Enterprise’ Charlie Gasparino mentioned, citing “regulatory sources.” He added that such an investigation is probably going an “inconceivable” activity since most Reddit customers are nameless.
A Robinhood spokesperson didn’t instantly reply to a request for touch upon potential investigations. And whereas the SEC hasn’t formally weighed in on Robinhood, Reddit, or GameStop, it issued a statement earlier this week saying it was “actively monitoring the on-going market volatility within the choices and equities markets.”