SEC call to action complicated by social media influenced volatility (Compliance Week)

The SEC faces the difficult task of determining the appropriate regulatory approach following the social media and chat room induced volatility in GameStop and other targeted stocks, Toeing the line between citing rule violations and appearing to undermine investor participation in the market, the SEC may decide to focus on the egregious activity it can uncover to deter future misconduct. According to FrontLine’s Founder and President, Amy Lynch, another SEC path to immediate action may be to prevent the wild price fluctuations by curbing short selling, and banning short sales of certain issuers. Ms.Lynch adds that it would look similar to how the EU banned short sales in the early days of the pandemic. See Compliance Week (one free view then subscription required), “Compliance lessons gleaned from GameStop market insanity”