New York (AFP)
From the Attorney General of Texas to the regulator of the American Stock Exchange, attacks were launched on Friday against large Wall Street investment funds and brokerage platforms, suspected of having wanted to manipulate the stock market by restricting certain exchanges.
In a vitriolic statement, the attorney general of Texas called on several companies, including brokers Robinhood and TD Ameritrade, for explanations of the limits they have placed on transactions in securities that have been the subject of mass purchases these last days.
"The big Wall Street companies cannot restrict public access to the free market and should not censor the discussion about it, especially if it is for their own benefit," blasted Ken Paxton.
"This likely coordination between hedge funds, brokerage platforms and internet servers to ward off threats to their market dominance is shockingly unprecedented and unfair. It stinks of corruption," he added.
The American regulator of the Stock Exchange, the SEC, had earlier in the day said to "monitor and assess closely the extreme volatility of the price of certain stocks" after the mad surge on Wall Street of titles like GameStop and the chain of cinemas AMC .
The Securities and Exchange Commission has pledged to act to "protect small investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by federal securities laws."
From Democrat MP Alexandria Ocasio-Cortez, who organized a discussion on the subject on the Twitch platform Thursday evening, to Republican Senator Ted Cruz, many elected officials have also expressed their outrage.
House of Representatives Finance Committee Chairman Maxine Waters on Thursday announced a parliamentary hearing, the date of which has not yet been set, on the "predatory attitude" of hedge funds.
- Robinhood falls out of favor -
Since the end of last week, the title of video game retailer GameStop has seen an incredible rise on Wall Street.
The stock suddenly rose when an army of amateur investors, using a forum on the Reddit site, decided to massively buy out the stock of this chain of video game stores, whose financial health and growth prospects nevertheless left to be desired.
These stock marketers have embarked on a battle against large investment funds, which had bet down on the title in order to reap substantial profits.
The growth of GameStop, which is traded under the symbol GME on the New York Stock Exchange, forces these funds to buy back at high prices the shares they had sold in order to limit their losses.
Other listed companies that investment funds saw collapsing also benefited from an influx, including enterprise software maker BlackBerry.
These fluctuations have prompted several brokers, including the popular Robinhood application, popular with stock marketers and whose motto is "democratizing finance for all", to limit trading on a basket of stocks deemed too volatile.
But after the outcry over this initiative, the platform announced "a limited resumption of purchases of these titles" from Friday.
However, many restrictions remained in place.
© 2021 AFP