Stirling MP Seeks Information on Stock Market Irregularities


Categories: Economics, Governance

Alyn Smith MP in the House of Commons

Stirling MP Alyn Smith has written to the UK Financial Conduct Authority, over allegations in recent days of possible financial impropriety by stock trading companies in relation to the GME Reddit campaign.

At the end of January, an online message board ‘r/wallstreetbets’ on the popular website Reddit implemented a crowd-sourced campaign to buy and hold stocks in popular US company GameStop, which itself had been betted against – ‘shorted’ – by large US hedge funds.

Driving the cost of shares to unpredictable levels, Reddit users hoped to inflict severe financial damage to exposed US hedge funds who had predicted the companies would soon face bankruptcy.

During the week-long frenzy, several stock trading companies such as Robinhood and Trading 212 suspended their users’ ability to buy stocks in companies targeted in the campaign, but instead kept the ability to sell these shares enabled.

Several claims have now emerged alleging a direct conflict of interest between some stock trading companies, and ownership stakes within these same companies by the same exposed hedge funds.

Alyn Smith MP said:

‘Regardless of your views on the stock market or the merits of ‘meme-warfare’, there should be fairness and equal access given to trade in these markets and stocks, be the trader a multi-billion dollar corporate hedge fund, or an enthusiastic new member to the stock-trading community.

‘I have written to the FCA to request additional information regarding this whole affair, to ensure the rights and protections afforded to retail investors are upheld and any potential wrongdoing is thoroughly investigated.’