United States Senator Elizabeth Warren (D-Mass.); a member of the Senate Committee on Banking, Housing, and Urban Affairs; sent a letter to Acting Securities and Exchange Commission (SEC) Chair Allison Herren Lee requesting that the agency provide Congress and the public information on how they will address the dramatic swings in market valuation of GameStop and other companies and respond to her questions about how the SEC will crack down on years of distortion in securities markets that have allowed the wealthy few to artificially inflate and deflate share prices and reap short-term profits while exacerbating wealth inequality.
“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,” Senator Warren wrote in her letter to the SEC. “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.”
In her letter, Senator Warren called on the SEC, which has a mandate to ensure the “fair, orderly, and efficient” function of the stock market, to review the recent trades and practices, fully and clearly define market manipulation rules and real enforcement standards, and relay to the public what the SEC will do to mitigate these unfair practices going forward. “The Commission must review recent market activity affecting GameStop and other companies, and act to ensure that markets reflect real value, rather than the highly leveraged bets of wealthy traders or those who seek to inflict financial damage on those traders,” Senator Warren wrote in her letter to the SEC. “To protect and restore public trust in sound securities regulation and enforcement, the Commission must identify gaps in existing securities laws and rules and ways in which the Commission can improve its enforcement capabilities.”NEW THIS AM: Warren Calls on the SEC to Address Stock Market Gamesmanship Amid Volatile GameStop Trades | U.S. Senator Elizabeth Warren of Massachusetts