Sen. Elizabeth Warren, D-Mass., says the GameStop trading frenzy is just the latest “ringing of the bell” that there are problems on Wall Street, and urges the Securities and Exchange Commission to “grow a backbone” and fix it.
In remarks on Sunday, Warren compared today’s stock market to a casino, where big-money players are manipulating the markets through measures like pump-and-dump and stock buybacks to inflate stock prices.
"We've got a real problem on Wall Street, and it's time to fix it," she told CNN’s Sunday news show “State of the Union.”
“We need a market that is transparent, that is level, and that’s open to individual investors. It’s time for the SEC to get off their duffs and do their jobs,” she added.
Day traders have banded together on Reddit to bump up prices on some stocks — particularly GameStop, but also AMC and Nokia — after noticing hedge funds were betting against them, Business Insider explained.
GameStop stock has skyrocket from below $5 late last year to a peak of more than $450 a share last week, BI reported.
Warren wrote to the SEC last Friday urging it to investigate the saga and asking how it would prevent similar incidents. Senate Majority Leader Charles Schumer, D-N.Y., is also pushing the SEC to launch an investigation, BI reported.
She’s now urging the SEC to reverse regulations introduced under President Ronald Reagan that allow companies to buy back their own stock and inflate prices.
"What's happening with GameStop is just a reminder of what's been going on on Wall Street now for years, and years and years," she told CNN. "It's a rigged game."
Some brokerages, including Robinhood, Charles Schwab, and TD Ameritrade, responded to the recent activity by restricting purchases in highly volatile stocks. Alongside the hedge funds themselves, these brokerages have come under fire for their decisions, with both politicians and Reddit users saying such moves deliberately disadvantage individual investors, BI reported.
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