The Securities and Exchange Commission, facing pressure to respond to the recent mania in the stock market, said it's seeking to identify potential misconduct and will scrutinize brokerages' decisions to halt buying that triggered a retail-investor revolt.
The SEC warned traders about engaging in illegal schemes to drive up share prices and said it was working with other regulators, stock exchanges and federal agencies to "identify and pursue potential wrongdoing," according to a statement released Friday by acting chairwoman Allison Herren Lee and the agency's commissioners.
The SEC leadership added that the agency "will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities."
The remarks were the most aggressive yet from Wall Street's top regulator following a weeklong frenzy that has seen small-time investors harness social media to drive up GameStop, AMC Entertainment and other stocks, hedge funds get crushed by their short bets, and Robinhood Markets and other brokerages restrict trading in the inflated securities.
By Friday, restrictions had been lifted and the massive rally in GameStop and others was back on. The stock had advanced 78% to $345 at 12:25 p.m. in New York after surging as much as 114% earlier in the day.