Federal attorneys are investigating meme-led trading in GME, AMC and silver: WSJ
The Justice Department joins CFTC and SEC probes into wild markets facilitated by Robinhood and other apps for retail traders.
The Department of Justice is reportedly the latest to turn up the heat on last month’s crazed markets.
Citing unnamed sources, the Wall Street Journal reported on Thursday that the DoJ’s fraud division and the San Francisco district attorney’s office had launched probes into the brokers (read: Robinhood) and social-media platforms (read: Reddit) who were at the center of wild bull markets on stocks like GameStop and AMC weeks ago.
A number of agencies have announced that they are looking into market manipulation concerns. The Securities and Exchange Commission released a cryptic statement to that effect as GME stocks were still convulsing, while just this morning the SEC shut down all trading in SpectraScience stock, a firm that had become the subject to meme-fied trading despite being functionally dead for several years.
The WSJ also reports that the Commodity Futures Trading Commission has begun a similar probe into the silver market, which spiked as trading on various stocks was shut down and internet interest dispersed.
Unlike the CFTC or the SEC, however, the DoJ handles criminal prosecutions, which carry the prospect of jail time.
Congress is likewise getting involved in the matter, with the CEOs of Robinhood, investment manager Melvin Capital and hedge fund Citadel reportedly preparing to testify before a House hearing scheduled for next Thursday.
