SEC gears up as Reddit’s commercial frenzy continues
Like GameStop and another Reddit favorite stocks remain heavily shorted and subject to large fluctuations, the Security and Trade CommissionOn Tuesday, announced measures to speed up the way it handles investigations by senior officials by giving them more law enforcement powers.
|GME||GAMESTOP CORP.||194.62||+4.70||+ 2.47%|
“This will allow senior officers to exercise the Commission’s delegated authority to authorize staff to subpoena documents and take testimony under oath.” This delegation of authority will allow investigative staff to act faster to detect and stop ongoing fraud, preserve assets and protect vulnerable investors, ”said Acting President Allison Herren Lee. said in a press release.
|AMC||AMC ENTERTAINMENT HOLDINGS INC||41.03||+0.93||+ 2.32%|
|BBBY||BED BATH & BEYOND, INC.||24.12||+0.65||+ 2.77%|
|BB||BLACKBERRY LTD.||10.76||+1.19||+ 12.42%|
Although the SEC did not specify Reddit, GameStop, or others by name, it noted that the move “helps ensure that investigative staff can work effectively to protect investors in an age when the pace of fraud – like the pace of the markets themselves – is never faster.
The SEC did not respond to FOX Business’s request for clarification.
Extreme trading of heavily shorted stocks such as GameStop, Bed Bath & Beyond, AMC and others prompted the popular investment app Robinhood last month to restrict trading in certain names, sending the retail community out in a frenzy.
It has also increased pressure on financial regulators, even becoming a daily issue during White House press briefings.
Just last week US Secretary of the Treasury Janet Yellen, on short notice, called a meeting with the SEC and the heads of the Federal Reserve, New York Federal Reserve and CFTC.
After the meeting, the Yellen team, in a statement, noted.
“The SEC and CFTC are currently reviewing whether business practices are compatible with protecting investors and a fair and efficient market. Secretary Yellen believes it is imperative to maintain the integrity of these markets and to ensure investor protection.
Former SEC Chairman Harvey Pitt agreed that reviewing business practices is a good first step, but noted the challenges regulators face in cases like this.
“Unless there is clear evidence that someone was deliberately trying to influence the price of a stock, there is not much the government can do about it,” he told FOX Business.
Robinhood CEO Vlad Tenev, who has championed the company’s decision to restrict trade in certain names, is expected to appear before Congress on February 18 to answer questions about what exactly has happened in recent weeks .
He also advocates the adoption of a real-time settlement system.