US Secretary Treasury Janet Yellen has requested a meeting with financial regulatory authorities to discuss recent market volatility following a social-media-fueled buying frenzy over shares in video game store GameStop and other stocks shorted by hedge funds.
Yellen called for the meeting with the Securities and Exchange Commission, the Federal Reserve and the Commodities Futures Trading Commission, the Treasury said in a statement late Tuesday.
"Secretary Yellen believes the integrity of markets is important and has asked for a discussion of recent volatility in financial markets and whether recent activities are consistent with investor protection and fair and efficient markets," it said.
Republican and Democratic politicians have called for a review of trading regulations in recent days after a group of online small-time stock traders helped boost the share prices of previously falling stocks, including GameStop and movie theater brand AMC Entertainment.
Investors organized on Reddit forums to target shares of companies that had been short-sold by hedge funds, which have bet that the price of the company would fall.
The moves led to some retail investor apps such as Robinhood -- which says its goal is to "democratize finance for all" -- to limit trades on some of the most volatile stocks last week.
Progressive US senators Bernie Sanders and Elizabeth Warren over the weekend called for action against what they said were Wall Street abuses by hedge funds revealed by the recent frenzy over GameStop shares.
"We need an SEC investigation," Warren told CNN Sunday. "It's a rigged game, and it's been a set of players who come in and manipulate the market."
And Sanders told ABC "We have to take a very hard look at the kind of illegal activities and outrageous behavior on the part of the hedge funds and other Wall Street players."
The SEC had promised it was watching the situation.
"The commission is closely monitoring and evaluating the extreme price volatility of certain stocks' trading prices over the past several days," the SEC said in a statement Friday.
After soaring more than 400 percent last week, GameStop shares were dipping Tuesday, losing close to 50 percent early in the day and bringing its two-day collapse to more than 65 percent, with AMC also on the downswing.