State and Federal Regulators Review GameStop Stock Activity Following Market Volatility

The stock price of video game retailer GameStop increased by over 1,000 percent in the span of a few days following a series of events, in part as a result of heavy buying from retail investors and enthusiasm for the stock expressed in a forum on Reddit. As a result, several trading platforms, including Robinhood, restricted investment in GameStop along with other stocks that saw steep stock price increases (see Robinhood official statement).

Following Robinhood's restriction of trading on GameStop, a class-action lawsuit was filed against Robinhood, describing the platform's removal of GameStop stock as a manipulation of the market and as in violation of its obligations to its customers. The SEC (see here and here), New York Attorney General and U.S. House Committee on Financial Services stated that they are closely reviewing the actions of trading platforms and market participants in light of the unusual price volatility.