In early 2021, ordinary retail investors mounted an assault against Wall Street hedge funds. Mobilizing on Reddit and relying on user-friendly trading apps like Robinhood, amateur investors sparked a short squeeze in the market for video game retailer GameStop’s
GME
The regulatory scrutiny culminated last July, when the SEC proposed new rules targeting conflicts of interest in financial firms’ use of “predictive data analytics” (PDA). PDA refers to technologies that analyze financial data and make predictions about market movements and investor behavior. These include technologies like robo-advisors, stock analysis algorithms, and other AI-driven tools used by broker-dealers and investment advisers to inform their investing strategies and recommendations to clients.
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