Hester M. Peirce is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on her recent remarks at the George Washington University Law School Regulating the Digital Economy Conference. The views expressed in this post are those of Ms. Peirce and do not necessarily reflect those of the Securities and Exchange Commission or its staff.
Thank you, Reni [Saula] for that introduction. It is a pleasure to be with all of you today. I will start with the usual disclaimer that my views are my own and not necessarily those of the Securities and Exchange Commission or my fellow Commissioners. The momentous market events of several weeks ago are relevant to the theme of this year’s conference—regulating the digital economy—and thus motivate my remarks.
The market events to which I am referring are, of course, the Reddit-threaded run-up in the prices of a number of meme stocks, the subsequent run-down in prices, and the many attendant colorful stories. At the top of the non-financial news feed were the market volatility, trading volumes, regular Joe-to-riches stories, hedge fund losses, short squeezes, gamma squeezes, glee at sticking it to the “suits,” anger at trading limitations, a jumble of emotions as stock prices fell from their highs, and debates about the intricacies of market structure. Movies to elucidate these events are on their way. [1]
The Securities and Exchange Commission, along with other regulators and market watchers, is still sorting through the many layers of those events, so I cannot give you a definitive assessment of what took place, let alone whether any significant regulatory changes or enforcement actions will result. Instead, I will offer some musings on the challenges that lie before the Commission as we decide whether and how to react to these events with new or modified regulations and, more generally, as we think about stepping up our game as a regulator of the digital economy.