Senator Elizabeth Warren called for an SEC investigation into Reddit posts and other entities, according to a letter she sent to the Acting Chair of the SEC.
After Redditors discovered large hedge funds had shorted massive quantities of GameStop ($GME), retail investors bought $GME in a frenzy, sending it surging 600%, and causing hedge funds to lose approximately $5 billion dollars. Popular investment platforms such as Robinhood responded by halting the ability of investors to freely purchase more shares, making their only option to sell.
“To what extent did online message boards, such as those on Reddit… impact the fluctuation of GameStop’s share prices? Did any of these practices violate existing securities laws?” Warren asked the Acting SEC Chair. “What steps will the SEC take to ensure that securities markets better reflect prices that are in line with the intrinsic and fundamental value of underlying companies?”
Elizabeth Warren has been considered as a “threat” to Wall Street, according to the Washington Post, but some see her letter as a means to target small investors and help hedge funds.
“Elizabeth Warren likes to pretend she stands with “the little guy,” but in reality, she’s a tool of the very hedge funds and financial elites that she fraudulently decries,” Donald Trump Jr. tweeted.
Elizabeth Warren likes to pretend she stands with “the little guy,” but in reality, she’s a tool of the very hedge funds and financial elites that she fraudulently decries https://t.co/Smkob9nzbz
— Donald Trump Jr. (@DonaldJTrumpJr) January 29, 2021
Elizabeth Warren has received thousands in donations from individuals and PACs on Wall Street, such as Goldman Sachs, Fidelity Investments, Morgan Stanley, and others from 2014–2018, according to an Open Secrets report on campaign and leadership PAC donations.
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