Arab Press

بالشعب و للشعب
Friday, Aug 22, 2025

The Reddit-fueled GameStop rally is reportedly under federal investigation for possible market manipulation - and Robinhood has been subpoenaed

The Reddit-fueled GameStop rally is reportedly under federal investigation for possible market manipulation - and Robinhood has been subpoenaed

Authorities are probing whether the army of Reddit traders manipulated the market by spreading false information to lift highly shorted stocks.
Federal authorities are probing the retail-trading phenomenon that boosted shares of GameStop, AMC, and other highly shorted stocks throughout January, the Wall Street Journal reported Thursday, citing sources familiar with the matter.

Prosecutors and regulators are investigating whether the frenzy of day trading was a form of market manipulation or other illicit activity. The Justice Department's fraud arm and the San Francisco US attorney's office are seeking information from brokerages and social-media platforms that fueled the trading activity, the Journal reported.

Robinhood Markets, the discount brokerage popular among the investors involved in the rallies, has been subpoenaed for its role in the event along with other brokers, according to the report.

Shares of GameStop and other recently unloved companies skyrocketed last month as members of the Wall Street Bets subreddit furiously piled into the stocks. Posts urging more traders to buy shares reached the top of Reddit's "popular" page, exposing even more novice investors to the trend as shares surged higher.

Reddit users also cheered the trade as a way to drive massive losses at short-selling hedge funds. Language on Wall Street Bets took on a populist tone that pitted the everyday trader against the Wall Street establishment.

Separately, the Commodity Futures Trading Commission is investigating how the horde of casual investors aimed to bid up silver by trading futures and a silver-tracking exchange-traded fund, according to the report. Wall Street Bets traders pivoted to silver shortly after GameStop shares fell back to earth. More recently, the crowd has targeted cannabis stocks for their next bullish bets.

Proving the GameStop phenomenon was a case of market manipulation requires authorities to wade into a murky regulatory environment. Officials would need to prove that investors used online forums to disseminate incorrect information and lift shares to an artificially inflated price. This kind of manipulation is commonly known as a pump-and-dump scheme.

Decoding such a scheme is made harder by the anonymous nature of Reddit accounts. Posts calling on more traders to buy shares were also largely comical and enthusiastic in nature and lacked claims about companies' underlying businesses. While some Wall Street Bets members stood out for their outsize gains or popular memes, most blended into the army of faceless day traders.

Lawmakers have also shown interest in dissecting the event and how it exploded into the mainstream. The House Financial Services Committee is slated to hold a hearing on February 18 on the matter. Rep. Maxine Waters of California said last week she wanted representatives from GameStop and Robinhood to testify along with Keith Gill, a Reddit user who allegedly made millions off the GameStop rally.

Senate Banking Committee Chairman Sherrod Brown indicated last month he too aims to hold a hearing.
Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Trump Backs Putin’s Land-for-Peace Proposal Amid Kyiv’s Rejection
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
United States Sells Luxury Yacht Amadea, Valued at Approximately $325 Million, in First Sale of a Seized Russian Yacht Since the Invasion of Ukraine
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
Germany Enters Fiscal Crisis as Cabinet Approves €174 Billion in New Debt
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Russia Formally Recognizes Taliban Government in Afghanistan
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Germany Seeks Taliban Deal to Deport Afghan Migrants
Emirates Airline Expands Market Share with New $20 Million Campaign
Robots Compete in Football Tournament in China Amid Injuries
×