Tara Pomparelli
Monmouth University
This article describes the GameStop short squeeze of January 2021, which was driven by retail investors from the online Reddit forum r/WallStreetBets. The short squeeze resulted in unprecedented market volatility and significant losses for institutional investors like hedge funds, leading to controversial trading restrictions by brokerages like Robinhood. This case study uses the GameStop saga to delve into key legal and ethical issues pertinent to an undergraduate business law class, including market manipulation, regulatory oversight/compliance, and conflicts of interest. It also examines fiduciary duties and class action lawsuits. By exploring these aspects, the study highlights the event's educational value in demonstrating many real-life examples of business law concepts while underscoring the need for robust regulatory frameworks in an era shaped by social media and technological advances.
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