Fearing that recent delistings and volatility “undermine market confidence,” the U.S. securities regulator says it is looking into the Robinhood fiasco.
The U.S. securities watchdog is looking into the affair of Robinhood and the Redditors.
At least in so many words. The Securities and Exchange Commission made a joint statement on Friday expressing concern over the “extreme price volatility of certain stocks’ trading prices over the past several days.”
Though the commission did using the words “Gamestop,” “Robinhood,” or “Reddit,” it’s obvious that what the commission is talking about is the recent chaos surrounding the three. It’s already attracted major regulatory pressure. The SEC did, however, specify:
“The Commission will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities.”
Robinhood, already the subject of enormous backlash from its users, is clearly in the sights of this announcement. It is not unprecedented for Robinhood to shut down trading on GME and other stocks; it is, however, suspicious that the firm cut off buying but not selling.
This story is developing and will be subject to updates.