SEC to review broker restrictions which halted individual operators from doing what hedge funds were doing
The first thing to note is that the issue being investigated was several brokerages stepping in to manipulate the market and prevent individual investors from buying or selling stock. This is not the circuit breaker triggers which also happened.
Brokerages like Robinhood and Cash app cancelled trades of GameStop, BlackBerry, and Bed, Bath, and Beyond resulting in significant losses to some investors (usually the little guys,) and helped gain back money for the larger hedge funds that had short sold as prices for the stock started plummeting.
Fun times. Not really sure where I stand on all of this, but it’s interesting to watch.
Oh yeah, the WSJ says the SEC will be investigating both the brokerages and whether they’ve got a market manipulation case, although whether they’re investigating the brokerages for this exclusively or Reddit and Elon Musk it doesn’t say.
[Wall Street Journal]
