Wall Street regulators signal tougher approach to industry after GameStop frenzy
Source: Washington Post
Business
Wall Street regulators signal tougher approach to industry after GameStop frenzy
By Tory Newmyer and Matt Zapotosky
Feb. 14, 2021 at 1:11 p.m. EST
The Biden administration is sending a clear signal to Wall Street that the industrys Washington cops are back on the beat. Regulators and federal prosecutors are probing potential misconduct in the GameStop trading frenzy, as the Securities and Exchange Commission moves to restore harsher penalties on wrongdoers.
Attorneys in the Justice Departments criminal division are conducting a wide-ranging investigation into possible market manipulation from the trading surrounding GameStop, and recently issued a subpoena to Robinhood as part of that, a person familiar with the matter said. The probe, though, appears to be in its early stages.
SEC acting chair Allison Herren Lee in a radio interview earlier this month said the agency already is investigating the matter from a number of different angles, and theyre very significant.
Specifically, she indicated the agency is looking into whether brokers such as Robinhood complied with regulations when they limited trading in certain so-called meme stocks. And she said the agency is looking for signs of market manipulation amid the trading mania. A Robinhood spokesman declined to comment.
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Tory Newmyer
Tory Newmyer covers economic policy and the intersection of Wall Street and Washington as the anchor of PowerPost's daily tipsheet The Finance 202. He previously worked at Fortune, where he spent seven years as the magazine's Washington correspondent. Follow https://twitter.com/torynewmyer
Matt Zapotosky
Matt Zapotosky covers the Justice Department for The Washington Post's national security team. He has previously worked covering the federal courthouse in Alexandria and local law enforcement in Prince George's County and Southern Maryland. Follow https://twitter.com/mattzap
Read more: https://www.washingtonpost.com/business/2021/02/14/sec-gamestop/
bucolic_frolic
(43,128 posts)and even though I never traded any of those heavily shorted stocks, things are fouled up in reporting trades from the clearing company, and they're not answering questions or making corrections thus far. Brokers are taking the heat for this stress test of the system, and the clearning co. should have been prepared.
Also it's been pointed out the longs didn't do anything the hedge funds do in aggregate every day, they just did it counter to the hedge funds. Also alarming was the acknowledgement that some hedge funds are acting as clearing, I think, or as market makers. To me it says volume is so huge. Countertrade operations at brokers are handling the risk internally, and hedge funds are clearing the overflow? I'm sure someone who really knows what's happening would have a good laugh at my attempts to understand, but that's what it looks like to me from what I've heard.
intrepidity
(7,294 posts)Nice!!
moriah
(8,311 posts)appmanga
(571 posts)...took place last week with Tilray, the marijuana stock that went from around $15 close to $69 in a couple of days and crashed back to ~ $30 in next two days. That merits as look as much as the GameStop shenanigans.
rpannier
(24,329 posts)In the words of C. Montgomery Burns, "Not bloody damn likely."
EarthFirst
(2,900 posts)...and the show will go on for the hedge fund equities managers.
Youd be blind to think otherwise.
mpcamb
(2,870 posts)mdbl
(4,973 posts)they are all "FREE MARKETS" until something screws them.
BumRushDaShow
(128,844 posts)No FAIR!!!111!111!!!
Steelrolled
(2,022 posts)played only a small part of the big run up. Institutional investors were all-too-willing to ride the wave up. The difference is that the institutional investors had experience and rationality on their side, and got out at the right time.