The Department of Justice is investigating the GameStop stock drama to determine whether there was market manipulation involved. Prosecutors have subpoenaed information from brokers, including Robinhood, where much of the trading activity took place.
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Several US government agencies are investigating the GameStop stock brouhaha to determine whether there was market manipulation involved having created what’s known as a short squeeze. The DOJ
and the US Attorney for San Francisco are seeking information about activity surrounding GameStop’s stock by brokers and users on Reddit and other social media sites. Prosecutors have subpoenaed information from brokers, including Robinhood, where much of the trading activity occurred. The SECC is also looking into whether there was manipulation and probing whether Robinhood and other brokerages that temporarily froze or otherwise restricted trading of GME were in compliance with federal regulations. Robinhood is also facing dozens of lawsuits after it restricted several stocks popular on the r/WallStreetBets subreddit, with people alleging the company sought to “manipulate the market” to help other financial institutions.
The House Financial Services Committee is holding a hearing into the GameStop drama on February 18th, where Reddit CEO Steve Huffman and Robinhood founder Vlad Tenev are expected to appear.
Robinhood did not immediately respond for comment.