US Justice Dept. Probes Fraud Suspicions in GameStop’s Rapid Stock Rise – Reports


WASHINGTON (Sputnik) – US Department of Justice and California state investigators are probing suspicions that market manipulation and other types of fraud were involved in the rapid rise in value of GameStop and AMC Entertainment shares in January, according to the Wall Street Journal.

The Justice Department’s fraud section and the San Francisco US attorney’s office have been investigating the case and interviewing brokers and executives of social-media companies that were centers of the trading frenzy, the report said on Thursday.

Federal and state prosecutors in the investigation have subpoenaed information from brokers including Robinhood Markets, a popular online brokerage that many individual investors used to trade GameStop and other shares, the report said.

GameStop shares soared from around $20 to $483 over just two weeks in January but now the stock has fallen back to a value of around $50 per share, the report added.

In a separate investigation, the Commodity Futures Trading Commission has initiated a preliminary investigation into whether misconduct took place when traders communicating via Reddit targeted silver futures and the largest exchange-traded fund tied to silver, the iShares Silver Trust, according to the report.


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