The US Securities and Exchange Commission warned on Monday that it is closely monitoring the frantic movements in the stock market, against the background of the stratospheric jump in the values of the meme shares AMC Entertainment and GameStop Corp.
“SEC personnel continue to monitor the market in the light of the continuing volatility of certain stocks to determine whether there have been any market disruptions, manipulative trading or other misconduct. In addition, we will act to protect retail investors if violations of federal securities laws are identified, ”the SEC said in a statement issued by a spokesman for the regulator.
The regulatory statement comes as AMC Entertainment Holdings AMC,
rises by 20% on Monday, which is over 2600% for the year so far. Meanwhile, shares of GameStop Corp. GME,
are over 12% and have risen by almost 1400%.
For comparison, the Dow Jones Industrial Average DJIA,
is over 13% so far this year, the S&P 500 SPX,
rose by more than 12% and the Nasdaq Composite Index COMP,
has won more than 7%.
Since the beginning of the year, individual investors have been aggressively betting on companies such as GameStop and AMC Entertainment and others, coordinating their efforts to increase the companies’ shares in social media sites such as Reddit and Discord.
Stocks of memes are those that rise on social sentiment, but are not necessarily based on fundamentals.
The SEC’s meme statement as senior agency officials spoke at the event of The Wall Street Journal’s chief financial officer on Monday came as SEC President Gary Gensler signaled that the regulator was monitoring areas of the market that had gained popularity, including companies for special purpose acquisitions, or SPACs, which are perceived as a risk area for retail investors.
Gensler, who chaired the Futures Trading Commission during the Obama administration, took control of the SEC in April.