During the past week, investors have seen GameStop Corp. stock soar to extreme heights driven, in large part, by the concerted efforts of participants in the r/WallStreetBets forum on Reddit to rally the stock rather than any change in the fundamentals of GameStop. Investment advisers can send this letter to their traders to deter them from participating in such activities.
These developments create a number of significant risks for investment advisers, including:
ACA has drafted a sample reminder communication for investment advisers to send to their traders regarding this issue. Download the communication template here.