Trending On Social -- Federal prosecutors and regulators are investigating whether market manipulation or other types of misconduct fueled the rapid rise last month in prices of stocks such as
In addition to the probe by the
The Wall Street Journal has reported that the
Spokesmen for the
Some commentators have said individuals coordinating on Reddit -- largely in its WallStreetBets forum -- openly engaged in a type of manipulation known as a pump and dump. In such a scheme, traders collude to inflate a stock's price, usually by spreading false information, and then profit by selling their stakes to people duped by the fraud.
Proving market manipulation generally requires showing that traders schemed to create an artificial price and took action to accomplish it.
Regulators and prosecutors can find out who bought and sold shares, relying on data known as "blue sheets," which brokers use to identify individuals behind trades. Tying the trades to public statements is more difficult; most people who talked about
If an investigation were to show that a few key individuals instigated the whole effort, that could buttress a manipulation case, according to securities lawyers. However, charging hundreds of defendants who traded in small increments and believed they were warring with hedge funds wouldn't be viable, the lawyers said.
SEC Acting Chair