Rep. Alexandria Ocasio-Cortez and Sen. Elizabeth Warren slammed hedge funds and investors who criticized the Reddit investors driving the astronomical GameStop rally this week, accusing them of treating the stock market "like their own personal casino" for years.
GameStop shares have soared more than 700% over the past four days, a price surge so dramatic that TD Ameritrade and Charles Schwab both placed restrictions on trading of the brick-and-mortar video game retailer.
"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," Warren, D-Mass., said in a statement on Wednesday.
Warren, a 2020 presidential candidate and a leading proponent of strict laws to rein in Wall Street and the private equity industry, renewed her push for the Securities and Exchange Commission to more tightly regulate the market.
“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," she said.
In a statement after the markets closed Wednesday, Allison Herren Lee, the SEC's acting chair, said the agency was "actively monitoring the on-going market volatility in the options and equities markets" and was working with regulators to "assess the situation and review the activities of regulated entities, financial intermediaries, and other market participants."
Federal Reserve Chairman Jerome Powell, speaking during a scheduled news conference on Wednesday, declined to comment on the matter.
White House press secretary Jen Psaki told reporters during an afternoon briefing that Treasury Secretary Janet Yellen is monitoring the situation, adding that "the stock market is not the only measure of the health of our economy.”
Ocasio-Cortez, D-N.Y., echoed Warren's message, tweeting on Wednesday: "Gotta admit it’s really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino."
GameStock has been popular in the Reddit forum "Wallstreetbets," where an army of at-home traders put their support behind the stock, betting that share prices would rise even as Wall Street short-sellers predicted the exact opposite. Short-sellers -- who bet on stock's decline by selling shares they don't own -- have lost billions this week.