[ad_1]
Saturday, January 30, 2021
“Stinks of corruption”
The US judiciary examines the final game dispute
After online brokers temporarily restrict Gamestop stock trading, the outrage is great, not just among small investors. The Texas attorney general now wants to investigate the matter. Meanwhile, the Robinhood trading platform faces a class action lawsuit.
The first judicial authorities have intervened in the dispute over speculation with shares of the video game retailer Gamestop and other companies on the US stock exchange. Texas Attorney General Ken Paxton announced on Friday (local time) that he had requested information from Robinhood and several other online brokers to find out if all was okay with restrictions on the trading of shares in Gamestop and some other companies.
Apparently there are agreements between hedge funds and trading platforms and web servers to protect themselves from threats to their dominance of the market. Wall Street companies should not restrict public access to the free market for their own benefit, the prosecutor said. “It reeks of corruption.”
In the conflict are hedge funds, which bet on the fall of the shares of companies in trouble, and amateur investors, some of whom are organized in online forums, who raise prices with concerted purchases. Due to trading restrictions from brokers like Robinhood, small investors, who had the upper hand in the test of strength, are frustrated on their way to profit. Some hedge funds have suffered extremely heavy losses from their bets, so there is a suspicion that trading platforms are behind them. Robinhood and company deny this, but the outrage is not only great among the investment community, but also in politics. New York Attorney General Letitia James also wants to investigate.
Meanwhile, on the stock market, the capricious prices of the stocks in question continued to cheer. After the trade restrictions of the previous day were relaxed at least a little, Gamestock’s papers closed with 68 percent more, those of the AMC theater chain, which is also a focus of speculation, increased 54 percent. But investors are so frustrated with Robinhood that as of Friday afternoon (local time), 26,000 of them had already joined a class action lawsuit via a special app.
The US Securities and Exchange Commission had reaffirmed prior to the start of operations that it would investigate the events surrounding the Gamestop hype. The SEC promised to protect retail investors if the facts point to manipulative business activities. The supervisory authority will guarantee “fair, orderly and efficient markets”. In view of the great enthusiasm, the agency created an additional online form and also urged interested investors to contact the SEC by email or phone. According to the financial network CNBC, 4,000 complaints had already been received by Friday afternoon.
