January 27, 2021

Jim Lundy Discusses What Attorneys Can Expect From the SEC Regarding a Potential Probe of the GameStop Trading Surge


ThinkAdvisor turned to partner Jim Lundy for insight on what attorneys who represent advisors and broker-dealers can expect from the Securities and Exchange Commission (SEC) regarding recent price run-ups and high trading volumes in shorted stocks, including GameStop and others that were promoted by a group on Reddit’s WallStreetBets board.

In the article “SEC Likely to Probe GameStop Trading Surge, but What Will It Find?” Lundy said that Faegre Drinker has “relayed information to several points of contact at the SEC” in the Washington headquarters and in a regional office “anonymously on behalf of clients.”

“My understanding is that certain other law firms around the country have done the same. The responses that we have received from the SEC in response to our submissions have been brief, noncommittal, and indicated no direction one way or the other in terms of what, if any, next steps that they may take. That’s fairly typical,” said Lundy, who was a senior trial counsel and a branch chief for almost a decade in the SEC’s Division of Enforcement.

Lundy further explained, “Due to the nature of the issues and multiple law firms who practice in this space submitting concerns on behalf of clients anonymously around the country … the enforcement staff should be amenable to investigating.”

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