U.S. government agencies have launched federal investigations into whether the social-media-driven activity around GameStop Corp.’s share price rise in January constituted illegal market manipulation.

According to a report today in The Wall Street Journal, both the U.S. Department of Justice and the Commodity Futures Trading Commission are formally investigating the pump of GME stock, and the Securities and Exchange Commission is also reviewing the matter.

The investigation by the justice department is being led by the department’s fraud section and the San Francisco U.S. attorney’s office who have sought information about the security activity from brokers and social media companies that were at the center of the trading frenzy. Subpoenas are said to have been issued for information to brokers including Robinhood Markets Inc. that was widely used by those buying up GameStop and other shares such as AMC Entertainment Holdings Inc.

The CTFC inquiry is reported to be focusing on whether misconduct occurred by traders, not only those on Reddit but also those who targeted silver futures and an exchange-traded fund tied to silver.

The GME pump occurred on Jan. 26 when users of r/wallstreetbets, a forum on Reddit where amateur traders share stock and investment tips decided that its millions of users should buy GameStock shares and then later AMC. As a result, GME stock rose from $76.74 Jan. 24 to $347.51. AMC stock, which had been trading below $3, surged to a high of $19.90. Both stocks have declined since, trading at $51.10 and $5.61, respectively, as of the close of regular trading Feb. 11.

Interest in what occurred — a stock pump that cost hedge funds who had been short selling GME and AMC stock tens of billions of dollars — has also been picked up at higher levels. The House Financial Services Committee is planning a hearing next week to examine the GameStop saga.

Reddit Chief Executive Officer Steve Huffman is among those who have been invited to testify, along with Robinhood CEO Vlad Tenev. The hearing has a colorful title: “Game Stopped? Who Wins and Loses When Short Sellers, Social Media and Retail Investors Collide.”

The hearing will also be looking into the decision by Robinhood to suspend trading on GME, AMC and other stocks. “I am concerned about whether or not Robinhood restricted the trading because there was collusion between Robinhood and some of the hedge funds that were involved with this,” House Financial Services Chair Maxine Waters said earlier this month.

Photo: GameStop