It looks like there is some serious trouble brewing for RobinHood and others who damaged retail traders over Gamestop.
The Securities and Exchange Commission said in a statement Friday morning that it is “closely monitoring the extreme price volatility of certain stocks trading prices” in recent days and that it stands ready to take aggressive enforcement action if market manipulation is found to have taken place.
The statement comes amid great public interest in a handful of stocks, including GameStop Corp. GME, +67.87%, AMC Entertainment Holdings Inc. AMC, +53.65% and Nokia Corp. NOK, -2.77%, which have been the target of professional short-selling investors who have bet these companies will fail.
The saga caught the attention of lawmakers in Washington after online brokerage Robinhood and competitors, including Interactive Brokers and TD Ameritrade, restricted the purchase of these shares, which have posted massive gains in recent months amid a social-media campaign aimed at boosting the shares of these troubled companies and harming short-selling hedge funds.
“The Commission is working closely with our regulatory partners … to ensure that regulated entities uphold their obligations to protect investors and to identify and pursue potential wrongdoing,” the statement reads. “We will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws.”
