EU Warns On Social Media Trading Data After GameStop

Law360, London (February 18, 2021, 5:09 PM GMT) -- Individual investors who make share-trading decisions based on social media recommendations could find themselves committing market abuse and suffer losses, the European Union's markets regulator has warned, following high volatility in shares in GameStop.

The European Securities and Markets Authority issued a statement on Wednesday warning of the risks involved in making trades based exclusively on informal recommendations through unregulated online platforms.

ESMA has stepped into the controversy after users of a forum on social news website Reddit piled up shares of the Texan video games retailer last month.

The traders, acting in unison, drove the GameStop Corp share price to astronomical levels, causing huge losses...

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