The Treasury secretary, Janet Yellen, is expected to meet with the heads of financial market regulators, including the Federal Reserve and Securities and Exchange Commission, this week to discuss the market volatility created by retail traders in “meme stocks” such as GameStop, according to a Treasury official.
The meeting will take place as early as Thursday, the official said. It is also expected to include representatives from the Commodity Futures Trading Commission and the Federal Reserve Bank of New York. The meeting was earlier reported by Reuters.
The meeting is a sign of heightened scrutiny in Washington toward the frenzy in trading over the past 10 days. Shares in GameStop, a video game retailer, recorded a remarkable surge last week but have since fallen from their dizzying heights, testing the will of investors who joined in the fervor as a challenge to Wall Street investors. Since Friday, the price of GameStop stock has plummeted from $325 to $90.
The shares rose about 11 percent in early trading Wednesday. AMC Entertainment, another company whose shares were embraced by online traders, rose about 7 percent, coming off a 41 percent drop the previous day.
The retreat on Tuesday had allayed concerns that the big hedge funds who were on the losing end of GameStop’s surge would have to sell shares of other, larger companies to make up for the losses.
Many companies announced across-the-board halts in donations via political action committees after the Capitol riot on Jan. 6. These pauses were mostly meant to be temporary, so intense internal debates are now taking place across corporate America about what to do as the self-imposed deadlines approach.
Companies are separating into three main camps:
Impose targeted bans. After reviewing their policies, some companies said they would suspend giving only to the 147 Republican members of Congress who objected to certifying the election results. That’s what Walmart and Google have done.
Stop all political donations. The brokerage firm Charles Schwab decided to close its PAC, concluding that “a clear and apolitical position is in the best interest of our clients, employees, stockholders and the communities in which we operate.”
Pause then restart. Many companies that paused all giving have yet to announce what happens next, and one possibility is that they simply go back to what they were doing before. “If they’re doing it hoping this issue goes away, I think that’s not very smart,” said Doug Pinkham, president of the Public Affairs Council.
Companies that have yet to say what they’ll do after an initial pause in all giving include Microsoft, which set a Feb. 15 deadline to decide; American Airlines, which is taking a three-month break; BP, which is pausing for six months; and Hilton, which said it…