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SEC's GameStop Report Investigates Role of 'Game-Like' Brokerage Apps A report by the SEC released Monday that investigated the trading controversy surrounding GameStop earlier this year has challenged the role of "game-like" trading apps.

By The Epoch Times

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A report by the Securities and Exchange Commission (SEC) released Monday that investigated the trading controversy surrounding GameStop earlier this year has challenged the role of "game-like" trading apps that may urge investors to trade stocks too frequently.

GameStop experienced a surge of activity in January following social media chatter that led to the term "meme stocks." Some brokerage apps temporarily banned some trades as a result of the volatile activity, with the SEC pursuing an investigation (pdf).

"January's events gave us an opportunity to consider how we can further our efforts to make the equity markets as fair, orderly, and efficient as possible," SEC Chair Gary Gensler said in a press release.

"Making markets work for everyday investors gets to the heart of the SEC's mission. I would like to thank the staff for bringing their expertise to this important report, and for their ongoing work on to address the issues that January's events raised," he added.

The New York Stock Exchange halted trading of the stock of video game retailer GameStop on Feb. 25 as its price surged above $100 per share in overnight trading. The stock had been favored by small investors in online outlets like the Reddit forum r/Wallstreetbets.

The halts were triggered by the stock price increasing or decreasing too quickly, the exchange stated on its website, citing the Limit Up-Limit Down (LULD) rule. The rule was adopted by major exchanges in 2012 to trigger a 5- or 10-minute trading halt on an individual stock in some circumstances, such as when its price abruptly shifts up or down.

Two months after the controversial online trading spike, the video game retailer announced it would sell up to 3.5 million of its shares.

The shares were sold through an "at-the-market" offering, which let companies place their stock on the market over a period of time.

The new report emphasized that the role of online brokerage firms to encourage investors to trade more frequently needs further review.

"Consideration should be given to whether game-like features and celebratory animations that are likely intended to create positive feedback from trading lead investors to trade more than they would otherwise," the SEC said in the report.

The controversial trades have had strong consequences across the industry. In addition to temporary trading by some online brokerage apps, companies have been fined for their involvement.

Massachusetts regulators fined MassMutual $4 million and ordered it to overhaul its social media policies after accusing the company of failing to supervise an employee whose online cheerleading of GameStop's stock helped launch the frenzy that shook Wall Street earlier this year.

By Christopher Burroughs

The Epoch Times, founded in 2000, is headquartered in Manhattan, New York, with a mission to provide independent and accurate information free of political bias or corporate influence. The organization was established in response to censorship within China and a lack of global awareness regarding the Chinese regime's repression of the spiritual practice Falun Gong.

The Epoch Times is a widely read newspaper that is distributed in 33 countries and is available in 21 languages. The publication has been critical in providing balanced and detailed reporting on major global events such as the 2003 SARS pandemic and the 2008 financial crisis. Notably, the organization has played a key role in exposing corruption inside China.

Aside from its human rights coverage, The Epoch Times has made significant contributions in a variety of fields. It has received praise for its in-depth analysis and expert perspectives on business, the economy and U.S. politics. The newspaper has also received praise for its broad coverage of these topics.

A series of editorials titled "Nine Commentaries on the Communist Party" appeared in The Epoch Times in 2004. It asserts that freedom and prosperity in China can only be achieved by eliminating the Communist Party, which violated China's cultural and spiritual values. In addition, the organization led the Tuidang movement, which resulted in over 400 million Chinese citizens quitting the Communist Party. In spite of this, 90% of websites referring to the "Nine Commentaries" were blocked by the Chinese regime.

The Epoch Times has been at the forefront of investigating high-level corruption cases within the Chinese regime, with its reporters taking significant risks to uncover these stories. The organization has received several awards for its investigative journalism.

The organization has received several awards for its investigative journalism. For more, visit www.theepochtimes.com.

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