SEC says it’s monitoring the ongoing volatility in certain stocks

AMC Empire 25 in Times Square is open as New York City theaters reopen for the first time in a year since the coronavirus shutdown on March 5, 2021.

Angela Weiss | AFP | Getty Images

The U.S. Securities and Exchange Commission said Monday it has been keeping a close eye on the frantic trading in meme stocks lately to ensure market stability.

“Given the continued volatility of certain stocks, SEC officials continue to monitor the market to determine whether there has been any market disruption, manipulative trading, or other misconduct,” an SEC spokesman told CNBC. “In addition, we will protect retail investors if violations of US securities laws are found.”

The comment came when the retail trade exploded on a handful of speculative names, notably AMC Entertainment, BlackBerry, Bed Bath & Beyond, and to a lesser extent GameStop. Retail investors kept piling up on these names as they encouraged each other on social media platforms like Twitter and Reddit’s WallStreetBets forum.

During AMC’s 83% surge last week, the stock was repeatedly the most active name on the Nasdaq. AMC is up more than 100% in strong trade this month alone, after rising 160% in May, propelling its rally above 2,500% in 2021.

TD Ameritrade has taken steps to increase the margin requirements for AMC and GameStop to 100%, which means that investors must buy all securities with cash.

In January, amid GameStop’s historic short squeeze, the SEC pledged to protect individual traders and challenge broker actions that “may disadvantage investors or otherwise inappropriately hinder their ability to trade certain securities.”

Did you like this article?
For exclusive stock selection, investment ideas and global CNBC livestream
Sign up for CNBC Pro
Start your free trial now

Comments are closed.