The U.S. Senate will soon weigh in on the eye-opening (and wallet-draining) stock situation booming the market right now.
Individual day traders on the u/wallstreetbets Reddit forum are taking on Wall Street. The upstart sees thousands of traders clash with billion-dollar brokerage and investment firms in a bid to help equalize the market, and short-sellers in particular are being punished. The result of this clash has skyrocketed GameStop stock by more than 600% in a week's time, and AMC stock briefly surged 300% to over $19 today before mellowing out at $9.77.
This bruhaha has caused lots of controversy. Major traders like Robinhood temporarily restricted buying and selling of these volatile stocks. This move was believed to help give brokerage firms time to cover their short positions--or to basically stabilize and freeze trading to give the billion-dollar firms time to buy back their stocks and cover their short bets (here's a primer on what short sales are).
Now the United States Senate is getting involved. We already knew the Secretary of Treasury was looking at the situation, but now Senator Sherrod Brown, who will soon be the Senate Banking Chairman, seems to be on the side of everyday traders.
"People on Wall Street only care about the rules when they're the ones getting hurt. American workers have known for years the Wall Street system is broken - they've been paying the price," Brown told Bloomberg.
"It's time for the SEC and Congress to make the economy work for everyone not just Wall Street. That's why, as incoming Chair of the Senate Banking and Housing Committee I plan to hold a hearing to do that important work."
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