Treasury reasury Secretary Janet Yellen and other financial regulators will discuss market volatility stemming from short squeezes on GameStock stock and other Reddit-focused trades.
Yellen will meet with officials from the Securities and Exchange Commission, the Federal Reserve, the New York Fed, and the Commodity Futures Trading Commission.
"We really need to make sure that our financial markets are functioning properly … and that investors are protected," Yellen told Good Morning American Thursday ahead of the meetings.
The market was rattled by retail investors from the Reddit group r/WallStreetBets last week as the group looked to take on hedge funds in a massive short squeeze.
The group targeted short sellers, mostly large institutional investors, who bet that a stock's price would go down. Amid a surge in buying, the group ran up the price of GameStop stock, among others. If a stock rises, short sellers can lose large sums buying back the stock to settle contracts.
The frenzy reached a fever pitch last week and trading app Robinhood halted trading on GameStop (GME), AMC Entertainment (AMC) and other shorted stocks. That sparked outrage online and from both sides of the aisle in Congress, over who has access to trading and the ability to move markets.
GameStop stock fell 17% on the stock market today after recovering some of the week's steep, earlier losses. AMC was down 11%. BlackBerry (BB) was off 2%, clothing chain Express (EXPR) fell 8%, and headphone maker Koss (KOSS) dropped 16%.
Yellen's meeting on GameStop stock comes ahead of a House Financial Services Committee hearing scheduled for Feb. 18 on the short squeeze titled "Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide." Officials from the SEC, the Financial Industry Regulatory Authority and the Depository Trust and Clearing Corp. will testify, according to The Hill.
A separate panel is expected to feature Robinhood CEO Vlad Tenev and an executive from Reddit. Committee Chairwoman Maxine Waters (D-Calif.) also said she wanted Keith Gill, a Reddit trader known as u/Deepf*ckingvalue, to testify.
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