- Former SEC chair Jay Clayton told CNBC the GameStop trading frenzy was not a pump-and-dump scheme.
- Clayton said social media investors including “Roaring Kitty” were “very transparent about what they were doing.”
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Former SEC chairman Jay Clayton told CNBC on Friday that trading activity during the GameStop market frenzy was not a “pump and dump scheme,” and Thursday’s hearing demonstrated transparency from social media investors.
Clayton says the SEC will likely take a look at whether there was coordinated behavior to manipulate GameStop’s stock price that soared 1,022% during the January rally, but “the quick answer is that “no pump and dump scheme was present.
“The overall participation in this, it was fairly transparent what was going on here,” Clayton said. “I must admit to being entertained by Mr. Kitty. You saw that people were very transparent about what they were doing and why they were doing it, which was fairly interesting.”
During Thursday’s hearing, Keith Gill, also known as “Roaring Kitty”, emphasized that his reasoning for buying GameStop stock and sharing his position was purely based on his belief that the company was dramatically undervalued, and he was clear explaining his fundamental case for buying GameStop to his social media followers.
Gill told the House Financial Services Committee that he still likes GameStop’s stock and he would buy it at its current price of roughly $43.