South Bay Democratic Rep. Ro Khanna said the GameStop episode “has demonstrated the power of technology to democratize access to American financial institutions, ultimately giving far more people a say in our economic structures.”
In a statement Thursday, Khanna called for “more regulation and equality in the markets," and accused Wall Street of spending billions to “crush” GameStop and “put workers out of business” instead of investing in future technology.
The mania has gone global, "whipsawing stocks from Amsterdam to Sydney," Bloomberg reported. "In Europe, short-seller favorites including Unibail-Rodamco-Westfield jumped 20% or more. E-commerce giant Rakuten Inc. and baby-care goods maker Pigeon Corp. climbed at least 6.9% in Tokyo on Thursday."
With the stock market near all-time highs, there had already been worries that a bubble was coming. "The danger, as the dot-com bubble showed, is that Mr. Market can rationalize just about anything and build it into a narrative," The Wall Street Journal's Jon Sindreu wrote.
The frenzy over GameStop has gotten the attention of other lawmakers and regulators.
Sen. Sherrod Brown, D-Ohio, the incoming chairman of the Senate Banking Committee, said Thursday that he planned to call a hearing on the "current state of the stock market."
Sen. Elizabeth Warren, D-Mass., on Wednesday called on market regulators to clamp down.
"For years, the same hedge funds, private equity firms, and wealthy investors dismayed by the GameStop trades have treated the stock market like their own personal casino while everyone else pays the price," she said in a statement. "It's long past time for the SEC and other financial regulators to wake up and do their jobs — and with a new administration and Democrats running Congress, I intend to make sure they do."
Massachusetts Secretary of the Commonwealth William Galvin, the state's top securities regulator, also sounded a warning about the situation.
"The marketplace should be a place where risk is taken, but not reckless risk and not a situation that undermines the system, and that's what we're looking at here," Galvin said on CNBC.
Then, late Wednesday, the Securities and Exchange Commission said in a statement that it was "aware of and actively monitoring the on-going market volatility" and that the agency was working with other regulators to "assess the situation and review the activities of regulated entities, financial intermediaries, and other market participants."
This story includes reporting by The Associated Press's Alex Veiga.
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