London Daily

Focus on the big picture.
Monday, Oct 06, 2025

The Reddit-fueled GameStop rally is reportedly under federal investigation for possible market manipulation - and Robinhood has been subpoenaed

The Reddit-fueled GameStop rally is reportedly under federal investigation for possible market manipulation - and Robinhood has been subpoenaed

Authorities are probing whether the army of Reddit traders manipulated the market by spreading false information to lift highly shorted stocks.
Federal authorities are probing the retail-trading phenomenon that boosted shares of GameStop, AMC, and other highly shorted stocks throughout January, the Wall Street Journal reported Thursday, citing sources familiar with the matter.

Prosecutors and regulators are investigating whether the frenzy of day trading was a form of market manipulation or other illicit activity. The Justice Department's fraud arm and the San Francisco US attorney's office are seeking information from brokerages and social-media platforms that fueled the trading activity, the Journal reported.

Robinhood Markets, the discount brokerage popular among the investors involved in the rallies, has been subpoenaed for its role in the event along with other brokers, according to the report.

Shares of GameStop and other recently unloved companies skyrocketed last month as members of the Wall Street Bets subreddit furiously piled into the stocks. Posts urging more traders to buy shares reached the top of Reddit's "popular" page, exposing even more novice investors to the trend as shares surged higher.

Reddit users also cheered the trade as a way to drive massive losses at short-selling hedge funds. Language on Wall Street Bets took on a populist tone that pitted the everyday trader against the Wall Street establishment.

Separately, the Commodity Futures Trading Commission is investigating how the horde of casual investors aimed to bid up silver by trading futures and a silver-tracking exchange-traded fund, according to the report. Wall Street Bets traders pivoted to silver shortly after GameStop shares fell back to earth. More recently, the crowd has targeted cannabis stocks for their next bullish bets.

Proving the GameStop phenomenon was a case of market manipulation requires authorities to wade into a murky regulatory environment. Officials would need to prove that investors used online forums to disseminate incorrect information and lift shares to an artificially inflated price. This kind of manipulation is commonly known as a pump-and-dump scheme.

Decoding such a scheme is made harder by the anonymous nature of Reddit accounts. Posts calling on more traders to buy shares were also largely comical and enthusiastic in nature and lacked claims about companies' underlying businesses. While some Wall Street Bets members stood out for their outsize gains or popular memes, most blended into the army of faceless day traders.

Lawmakers have also shown interest in dissecting the event and how it exploded into the mainstream. The House Financial Services Committee is slated to hold a hearing on February 18 on the matter. Rep. Maxine Waters of California said last week she wanted representatives from GameStop and Robinhood to testify along with Keith Gill, a Reddit user who allegedly made millions off the GameStop rally.

Senate Banking Committee Chairman Sherrod Brown indicated last month he too aims to hold a hearing.
Newsletter

Related Articles

0:00
0:00
Close
Munich Airport Reopens After Second Drone Shutdown
France Names New Government Amid Political Crisis
Trump Stands Firm in Shutdown Showdown and Declares War on Drug Cartels — Turning Crisis into Opportunity
Surge of U.S. Billionaires Transforms London’s Peninsula Apartments into Ultra-Luxury Stronghold
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Jeff Bezos Calls AI Surge a ‘Good’ Bubble, Urges Focus on Lasting Innovation
Japan’s Ruling Party Chooses Sanae Takaichi, Clearing Path to First Female Prime Minister
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Taylor Swift’s ‘Showgirl’ Launch Extends Billion-Dollar Empire
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
U.S. Prosecutors Move to Break Up Google’s Advertising Monopoly
×