Regulators to Take Closer Look at Trading Practices

thebalancemoney.com:

Markets were resilient last week in the face of extreme volatility and high volume after an army of retail investors on Reddit banned together to buy GameStop shares and force a short-squeeze among hedge funds, regulators said Thursday. However, regulators said they still want to take a closer look at trading practices to ensure markets are fair for all investors—with an emphasis on all.

The uproar over unfair trading practices came after Robinhood and other brokers restricted trading in some stocks last week as volatility soared and frenetic trading from both individual investors and Wall Street hedge funds took stock prices on a wild ride. Individual investors said the restrictions prevented them from being able to participate at crucial times when stocks were surging, and at least 30 lawsuits across the country were filed against Robinhood by irate retail investors. Robinhood did not respond to requests for comment this week.

That prompted U.S. Treasury Secretary Janet Yellen to call a meeting on Thursday with top regulators at the Securities Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and Federal Reserve Board to discuss what happened last week. By the end of the meeting, they decided the “core infrastructure” of the markets was “resilient” but agreed there had to be further review of Wall Street’s operations to make sure they are fair, investors are protected, and markets are efficient, according to an email statement from the Treasury.

Even though Robinhood removed all trading restrictions on Friday, the Treasury said in the email statement that the SEC and CFTC would continue to review trading practices and that the SEC will release a “timely study of the events.”

The House Financial