U.S. SEC praises equity market structure, absolves short sellers in GameStop report

www.reuters.com
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The U.S. markets functioned well during January's GameStop (GME.N) volatility, while short selling was not the main cause of the unprecedented rise in the 'meme stock,' according to a long-awaited Securities and Exchange Commission (SEC) report.
U.S. one dollar banknotes are seen in front of displayed GameStop logo in this illustration taken February 8, 2021. REUTERS/Dado Ruvic/Illustration/File Photo/File Photo

WASHINGTON, Oct 18 (Reuters) -

The report published on Monday provides a post-mortem into how amateur traders using commission-free retail brokerages drove shares in GameStop and other popular meme stocks to extreme highs, squeezing hedge funds that had bet against them.

Amid the intense volatility, several brokerages restricted trading in the affected stocks, curbing the rally, infuriating retail traders, sparking outrage from policymakers, and leading to a Congressional hearing.

Despite the extraordinary series of events, the SEC concluded that the basic plumbing of the market remained "sound," an SEC official said. The report also found that positive sentiment on video game retail company GameStop rather than dislocations caused by short selling was the main driver of GameStop's stock spike. read…
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