SEC reviewing volatility on Wall Street, vows to protect amateur investors

Younger investors are using online forums like Reddit to swap trading ideas and have spent weeks buying shares in struggling retail companies to force the hand of powerful hedge funds.
1:59 | 01/30/21

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Transcript for SEC reviewing volatility on Wall Street, vows to protect amateur investors
There are new developments in the disruptive and somewhat confusing stock market showdown. The S.E.C. Now investigating tonight. New traders at home on inexpensive apps pitting themselves against Wall Street hedge funds. The markets taking a hit, falling 620 points. The concern now, could this affect others and their retirement investments? Here's Rebecca Jarvis again tonight. Reporter: Tonight the sec now reviewing that volatility rocking Wall Street. Today the Dow plunging 6 hundred points. It's really a casino atmosphere there. Reporter: Young speculators buying again after trading platforms like the robinhood app lifted some restrictions. He jumped in. It's a really, really weird time we're living in. I had never thought I would invest in stocks casually like that, but I saw the opportunity, downloaded the app on my phone and did it. Reporter: The newcomers using sites like Reddit and apps like robinhood, have spent weeks . The S.E.C. Will probably look at two things, one, to what extent do platforms have some sort of obligation to warn or to educate new investors about the risks of investing in these types of stocks? And 2, does this type of volatility inject systemic risk into the markets? Reporter: David, that's a key concern now, whether that's happening in just a handful of stocks can have a spillover impact on the broader stock market. It's important to keep in mind, the 401(k), the Ira is responded to be invested over the long-term so it can withstand volatility. Rebecca, thanks to you tonight as well.

This transcript has been automatically generated and may not be 100% accurate.

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