Nasdaq CEO Adena Friedman suggested Wednesday that her exchange could halt trading activity for stocks, in the event they were targeted by internet users, to enable the exchange to investigate possible manipulation and allow investors to “recalibrate.”
She made the comment in a morning interview with CNBC’s Joe Kernen, speaking in reference to price surges inspired by Reddit users. Members of the website’s “WallStreetBets” forum caused stock prices to surge to obscene heights this week for companies including GameStop and AMC Theatres.
“I think that, in general, when we evaluate how we would manage through a situation where you see a significant run-up in a stock not based on news, not based on fundamentals — what we do is we do have technology that evaluates social media chatter. If we see a significant rise in the chatter on social media channels … we also match that up against unusual trading activity, [and] potentially halt that stock to allow ourselves to investigate the situation, to be able to engage with the company, and to give investors a chance to recalibrate their positions.”
GameStop, as well as AMC Theatres, appear on the New York Stock Exchange (NYSE) rather than on the Nasdaq, leaving Friedman powerless to influence this week’s events. But some regulators have called on the NYSE to halt trading for at least GameStop, including Massachusetts’ top securities regulator, who said the robust investment activity wasn’t “rational.”
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