President Biden’s top economic adviser said the administration would take a look at the legal questions surrounding the roller-coaster ride. Gametop last week pitted small-dollar traders against well-heeled hedge fund managers, raising its stock to astronomical levels.
“I can tell you that the SEC is focused on fully understanding what happened here. And their focus is also on protecting retail investors and the integrity of the market,” Brian Desse, head of the National Economic Council, told NBC News ” Meet the Press.
The Securities and Exchange Commission said last Friday that it would take action to identify potential misdeeds and pursue them.
SEC Chairman Alison Herren Lee said in a statement, “The Commission will review actions taken by regulated entities that may harm investors or otherwise inhibit their ability to trade certain securities.”
An army of everyday investors organized on redit forums such as Voltisbits worked to reduce and sell betting hedge funds through shortselling, which would reduce Gametop’s stock.
He spent millions to buy the stock of the financially struggling brick-and-mortar store, forcing many top-tier investment firms to sell at huge losses and even stear losses.
At one point, GameStop’s stock hit a high of $ 492 a share before falling to $ 325 on Friday.
In 2019, it was trading at $ 3.30 per share.
Robinhood, the popular stock trading app, drew widespread criticism on GameStop on Friday for temporarily closing the trade.
NBC News host Chuck Todd asked Desse if he thought the short sale should be illegal.
“We are going to look at those issues and definitely understand this particular episode and the broader questions completely. Our immediate focus here is on the action that we need to build a destination under this economic crisis.