23:16 GMT28 February 2021
Listen Live
    Get short URL

    While some netizens urged Warren to focus her attention on hedge funds and their owners rather than on small investors, others suggested a ban on short sales instead.

    US Democratic Senator Elizabeth Warren has sent a letter to the Securities and Exchange Commission (SEC) asking it to investigate the scandal over the recent surge in GameStop's stock price.

    Noting how GameStop's share price skyrocketed after “anonymous traders” – who devised a plan to counter hedge funds shorting the company on a Reddit forum – Warren argued that, "in addition to GameStop, several other publicly traded companies including AMC; BlackBerry; Bed, Bath, and Beyond; Nokia; and Tootsie Roll Industries have seen huge shifts in their share price driven by similar internet trading schemes."

    "These wild fluctuations are just the latest indication that many private equity firms, hedge funds, and other investors, big and small, are treating the stock market like a casino, giving little consideration to the companies, communities, workers, and consumers that may be affected by these risky bets," the senator mused. "The recent chaos reveals a clear distortion in securities markets, with benefits accruing to investors that do not clearly benefit the company’s workers, consumers, or the broader economy."

    ​Sharing details on Twitter, Warren explained how she told the agency to explain exactly what is being done to "prevent market manipulation."

    Quite a few social media users, however, view Warren’s move as an attack against "working class retail investors," with some urging her to direct her attention towards hedge funds, though several netizens sought to defend the senator’s actions.

    "I usually support you, but this is ridiculous. This is the people using what the market makers do against them," one netizen wrote. "We're f*cking with the system. This will only lead to further oppression of the people."

    Some proposed what they see as a solution to the problem in question, such as banning short sales outright.

    ​This development comes as efforts of small market participants, coordinated via social media platforms like Reddit, resulted in shares of underperforming companies like GameStop and AMC soaring to historic highs, prompting certain online trading platforms to prohibit small investors’ from buying certain stocks. 

    social media, letter, US Securities and Exchange Commission (SEC), stock market, Elizabeth Warren, US
    Community standardsDiscussion