‘Grow A Backbone’: Elizabeth Warren Ramps Up Pressure On SEC To Regulate Stock Market

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Democratic Massachusetts Sen. Elizabeth Warren on Sunday called on the U.S. Securities and Exchange Commission (SEC) to “grow a backbone” in response to the GameStop trading hysteria.

Individual retail investors purchased GameStop ($GME) stock in a frenzy last week after Reddit users discovered that large hedge funds had shorted significant amounts of the stock. The subsequent market hysteria caused the price to surge 600% and hedge funds lost approximately $5 billion as a result.

“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,” Warren told CNN anchor Dana Bash during a Sunday morning “State of the Union” appearance. “It’s a rigged game. And it’s been a set of players who come in and manipulate the market.”


“They’ve turned this stock market not into a place where you get capital formation to support businesses, but more into a casino,” she continued. “And they’ve been doing all kinds of market manipulation, pump and dump of companies that buy back shares of their own stock so that they can inflate stock prices. We need a market that is transparent, that’s level, and open to individual investors. It is time for the SEC to get off their duffs and do their jobs.”

“Stock prices should invest the value of the company, what investors think it’s going to be able to make going forward and how well the business is run,” she continued. “The SEC has some pending rules on stock manipulation. They need a broader look at how companies, how hedge funds manipulate the market, and then they need to put rules in place to stop it and grow a backbone to enforce those rules.”

Robinhood, a popular stock market purchasing app that allows individuals to buy and trade stocks with no fees, responded to last week’s mayhem by halting the ability to buy GameStop stock.

Warren argued that a “transparent” market can help individual investors enter more easily and efficiently.

“We talk about competitive markets,” she said. “We talk about efficient markets. But the truth is the hedge funds, many of the giant corporations, they love the fact that the markets are not efficient. They love being able to manipulate these markets because they get better returns and individual investors lose out.” (RELATED: Elizabeth Warren Urges More Regulation To Prevent ‘Dramatic Swings’ In Stocks Like GameStop)

“So I want to see the SEC come in, clean this up,” the Massachusetts senator continued. “GameStop is just the latest ringing of the bell that we’ve got a real problem on Wall Street and its time to fix it.”