Securities Law Professors Professor John C. Coffee Jr. and Joshua Mitts provide context and commentary on volatile trading powered by investors coordinating through social media.
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In 2019 Joshua Mitts, Associate Professor of Law, published a paper Focusing on the rise in brief activism on Twitter and other social media. Last week, his predictions played out in real time as retail investors, led by members of a Reddit community, churned the stock market through aggressive and coordinated purchases of stock options for companies targeted by short sellers, including billion dollar hedges of funds. After organizing on social media, individual investors added value to companies including GameStop, AMC Entertainment, and Nokia.
With broker-dealers like Robinhood and Interactive Brokers restricting users' ability to trade certain stocks - and the value of those stocks plummeting a day later - lawmakers called for hearings and investigations into the behavior of trading platforms.
How should securities regulators react to this duel between institutional short sellers and retail investors? In search of answers, news outlets across the country sought commentary and legal analysis from Mitts and John C. Coffee Jr., Adolf A. Berle Professor of Law, a longtime leading expert in securities law. See more from each professor below.
About this story
- category
- Law School News
- Fields of study
- Company, commercial and transaction law
- Constitutional law, regulation and public order
- subjects
- John C. Kaffee jr.
- Joshua Mitts
- Faculty Scholarship and Ideas
- Released
- February 01, 2021
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