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Meme-Stock Frenzy Gets a Fresh Look That Questions SEC Narrative

  • Academics say stock really was driven higher by short covering
  • SEC cast doubt on short squeeze in its October GameStop report
Gary Gensler

Gary Gensler

Photographer: Evelyn Hockstein/Reuters/Bloomberg

Meme-stock mania might have been a case of traders banding together to take down hedge funds after all.  

That’s the contention of new research that challenges the Securities and Exchange Commission’s view that a so-called short squeeze played little part in pushing GameStop Corp. into the stratosphere in January 2021. The regulator failed to examine relevant securities-lending data and didn’t study a long enough stretch of transactions, a half a dozen academics from Columbia University, the University of Notre Dame and elsewhere asserted in a paper sent in recent weeks to SEC Chair Gary Gensler.