The trading of GameStop stocks might need some sort of intervention, but it shouldn’t come from the government, Larry Kudlow said Monday.
“I don’t really see what the issues are. I don’t want to see more federal government regulations of these markets,” Kudlow, a top White House economic adviser during the Trump administration, said on Fox Business.
“If there are issues here, let the exchanges deal with the issues, let the private exchanges deal with the issues. I don’t want the federal government mucking around with a lot of crazy class warfare,” Kudlow added.
GameStop stock started soaring last month when a group of small investors began buying up shares and options after learning that several hedge funds had bet on the video game company’s demise. The price jumped from $17 to nearly $350 a share amid the frenzied trading.
Brokerages implemented restrictions on trading GameStop shares last week, including Robinhood.
The Securities and Exchange Commission (SEC) said on Jan. 29 that it was reviewing the trading volatility.
“As always, the Commission will work to protect investors, to maintain fair, orderly, and efficient markets, and to facilitate capital formation. The Commission is working closely with our regulatory partners, both across the government and at FINRA and other self-regulatory organizations, including the stock exchanges, to ensure that regulated entities uphold their obligations to protect investors and to identify and pursue potential wrongdoing. The Commission will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities,” SEC officials said in a statement.
“In addition, we will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws. Market participants should be careful to avoid such activity. Likewise, issuers must ensure compliance with the federal securities laws for any contemplated offers or sales of their own securities.”
Brian Deese, who succeeded Kudlow as chair of the National Economic Council, said on NBC’s “Meet the Press” that the commission is focused on “protecting retail investors and also the integrity of the market.”
President Joe Biden believes congressional attention on issues raised by the volatility “is appropriate,” White House press secretary Jen Psaki told reporters on Monday.
“I don’t have anything further to predict other than we welcome the opportunity to work with members who have proposed ideas,” she said.
