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Biden Aides Say Market Oversight of GameStop Frenzy Is Working

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Tony Czuczka and Gregory Calderone
·2 min read
Biden Aides Say Market Oversight of GameStop Frenzy Is Working
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(Bloomberg) -- President Joe Biden’s top economic advisers expressed confidence in U.S. market regulators, with one saying they should be concerned less with speculation and volatility than with ensuring that the “underlying plumbing” is sound.

That’s the job of the U.S. Securities and Exchange Commission “and if you read their statements, you’ll find that they’re very much on that case,” Jared Bernstein, a member of Biden’s Council of Economic Advisers, said on “Fox News Sunday.”

His comments follow a week of Wall Street frenzy centered on the video game retailer GameStop Corp. that burned hedge funds and prompted calls by some Democrats, including Senator Elizabeth Warren, for the SEC to address market manipulation.

“What’s happening with GameStop is just a reminder of what’s been going on, on Wall Street now for years and years and years,” Warren said Sunday on CNN’s “State of the Union.” “It is time for the SEC to get off their duffs and do their jobs.”

The SEC is operating under leadership of Acting Chair Allison Herren Lee while Biden awaits Senate confirmation of Gary Gensler, his pick to lead the agency.

“The president’s main concern there is that the regulator in charge, the Securities and Exchange Commission, has to make sure not that there’s no volatility and speculation in the market -- that’s a constant -- but that the underlying plumbing of the financial markets remains sound,” Bernstein said.

The SEC said Friday it’s “closely monitoring the extreme price volatility of certain stocks’ trading prices over the past several days” and reviewing “actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities.”

Lawmakers from both parties last week questioned why platforms like Robinhood Markets Inc. curbed trading in some of the companies whose share prices surged after being touted on social media.

Read more: GameStop Short Nightmare Shows Few Signs of Becoming a Contagion

Brian Deese, the head of Biden’s National Economic Council, said last week’s stock swings are “appropriately being investigated” by the SEC with a “real focus on protecting retail investors and the integrity of the market.”

He suggested the administration might seek to widen its monitoring, saying “we are going to look closely at the broader policy questions associated with the equity markets.”

The chairs of two House and Senate committees pledged last week to hold hearings on the recent gyrations in the stock market but no dates have been announced.

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