During an interview with CNBC on Wednesday, SEC chair Gary Gensler commented in favour of retail traders from Reddit Wallstreetbets, while he asked whether SEC should cease this coordinated effort.
He also asked “If three hedge fund members work in concert to smash a short hedge fund, the 5 million Reddit people would say that’s legal, but perhaps it shouldn’t be,” “If 5 million people decide to smash a hedge fund that’s short, is that ok? What’s within the bounds of what you can do to smash a short seller?”
“People come on your show and they advocate either to buy or sell a security,” Gensler said. “Before we had television, people did it on the radio, now we have various social media platforms.
That’s not only free speech, but it’s part of what makes our capital markets robust, that people can disagree and disagree using the media of the day. But I also think we do police the markets for fraud, manipulation, for pump-and-dump schemes and the like.”