SEC Releases Official Statement on Recent Market Volatility Owing to GME and AMC Price Pump

By Prashant Jha
Published January 29, 2021 Updated January 29, 2021
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Image Source: Reuters

SEC Releases Official Statement on Recent Market Volatility Owing to GME and AMC Price Pump

By Prashant Jha
Published January 29, 2021 Updated January 29, 2021

The US Securities and Exchange Commission on Friday morning released an official statement regarding the ongoing volatility in the market owing to the surging price of GameStop (GME) and AMC.

Nasdaq and Robinhood suspended the trading of GME and AMC citing market manipulation. The outrage after the halting caught the eye of congresswoman Alexandria Ocasio Cortez, who called for an investigation.

The SEC in its official statement said,

The Commission is closely monitoring and evaluating the extreme price volatility of certain stocks’ trading prices over the past several days. Our core market infrastructure has proven resilient under the weight of this week’s extraordinary trading volumes. Nevertheless, extreme stock price volatility has the potential to expose investors to rapid and severe losses and undermine market confidence.

SEC Promises to Protect Real Investors

The recent price surge of GME shares owing to a short squeeze created by a bunch of Redditors and retail investors caused many hedge funds to lose billions on their short positions. Many jumped to call it a market manipulation leading to a series of events that led to the involvement of government agencies such as the SEC and DOJ.

The price of GME shares fell yesterday during the late evening due to the halt of trade. However, as soon as the restrictions were lifted the price of GME soared again.

The official statement of the SEC came on behalf of Acting Chair Allison Herren Lee, Commissioner Hester M. Peirce, Commissioner Elad L. Roisman, and
Commissioner Caroline A. Crenshaw and promised that they would act to protect real investors and maintain a free and fair market.

The SEC also took note of retail traders and said,

Also, we will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws. Market participants should be careful to avoid such activity. Likewise, issuers must ensure compliance with the federal securities laws for any contemplated offers or sales of their securities.

 

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Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Prashant Jha
1086 Articles
An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.

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