US financial regulators determined that the infrastructure of stock and commodity markets remained “resilient” during the volatility in trading seen over the past few weeks.
“The regulators believe the core infrastructure was resilient during high volatility and heavy trading volume,” according to a statement issued by the US Department of the Treasury following a meeting on Thursday convened by US Secretary of the Treasury Janet Yellen.
Officials also agreed that the US Securities and Exchange Commission (SEC) should issue a “timely study of the events.”
Yellen called the confab after surges in stocks including GameStop Corp and sudden trading curbs on smaller, retail investors spurred concerns about consumer protections.
The SEC is investigating for signs of fraud, while key US House of Representative and Senate committees are planning hearings.
The SEC and the US Commodity Futures Trading Commission (CFTC) are also “reviewing whether trading practices are consistent with investor protection and fair and efficient markets,” the department said on Thursday.
The gathering brought together the heads of the Treasury, the Federal Reserve, the SEC, the CFTC and the Federal Reserve Bank of New York, which serves as the central bank’s main monitor of Wall Street.
Yellen “believes it is imperative to uphold the integrity of these markets and ensure investor protection,” the department said.
The meeting gave the administration of US President Joe Biden a chance to demonstrate that itj is attuned to complaints about potential manipulation and unfair investor treatment after two congressional committees moved to hold hearings.
The controversy erupted late last month during a spectacular clash between retail investors and powerful hedge funds that pushed a handful of stocks, including GameStop, in opposite directions. That clash raised concerns over whether some investors were engaged in share-price manipulation.
However, the dust-up escalated when several broker-dealers were forced to post much higher collateral to cover the cash commitments behind massive buy orders in suddenly volatile shares.
That prompted Robinhood Markets Inc and other brokers catering to retail traders to suspend buying in certain shares, enraging customers and bringing accusations of unfair treatment.
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