Things are starting to get real with the WallStreetBets Reddit day traders and hedge fund short sellers. The Wall Street Journal reported Wednesday that “Federal prosecutors and regulators are investigating whether market manipulation or other types of misconduct fueled the rapid rise last month in prices of stocks such as GameStop Corp. GME -4.58% and AMC Entertainment Holdings Inc., AMC -1.90%.”
The WSJ wrote that “The Justice Department’s fraud section and the San Francisco U.S. attorney’s office have sought information about the activity from brokers and social-media companies that were hubs for the trading frenzy,” and “Prosecutors have subpoenaed information from brokers such as Robinhood Markets Inc., the popular online brokerage that many individual investors used to trade GameStop and other shares.”
Not to be left out of the dogpiling another regulator, the Commodity Futures Trading Commission, is conducting an investigation into whether “misconduct occurred as some Reddit traders targeted silver futures and the largest exchange-traded fund tied to silver.”
The Securities and Exchange Commission, feeling left out, is reviewing the trading frenzy as well. If that’s not enough, the House Financial Services Committee is planning a hearing on Feb. 18 to determine what happened with respect to the trading of GameStop’s stock.
Allison Lee, the acting chair of the SEC, said that her enforcement division is working “around the clock right now” to determine if there was market manipulation. The SEC will also investigate to find out if online brokerages such as Robinhood and insiders at GameStop complied with rules and regulations.
Dick Tracy, Nancy Drew, Deputy Droopy Dog, Barney Fife and the actors from all the casts of Law and Order have all joined the investigations too.