By Ben Bain

(Bloomberg) --
U.S. Securities and Exchange Commission investigators are combing social media and message board posts for signs that fraud played a role in dizzying stock swings for GameStop Corp., AMC Entertainment Holdings Inc. and other companies, according to people familiar with the matter.

The scrutiny is being done in tandem with a review of trading data to assess whether such posts were part of a manipulative effort to drive up share prices, said the people, who requested anonymity because the review isn’t public. The regulator is specifically on the hunt for misinformation meant to improperly tilt the market, the people said.

The prevailing narrative is that Wall Street short-sellers were caught flatfooted over the past two weeks as retail traders banded together via Reddit message boards and bought up stocks that hedge funds were betting against. But some market participants, including famed short-seller Carson Block, have started to speculate that the short squeezes that drove GameStop, AMC and other stocks to exorbitant heights might have also involved professional investors who either took advantage of the Reddit-fueled frenzy or helped hype it.

The SEC hasn’t said whether there’s anything to Block’s theory, but acting chair Allison Herren Lee said in a statement earlier this week that the agency was looking at “compliance with regulatory obligations, adequate and consistent risk disclosure, and determining if any fraudulent or manipulative behavior has occurred.”

There is also mounting concern about the possibility of bot activity in Reddit’s WallStreetBets chat after a spokesperson for the forum told CBS News that there was a “large amount” of it and that some posts were being blocked by an automated moderation system.

While shares of GameStop have sharply retreated this week, pressure is growing on the SEC to figure out what happened. Senator Elizabeth Warren, one of Wall Street’s leading critics in Washington, has demanded that the SEC investigate the “casino-like swings.” Both the House and Senate are planning to hold hearings on the market mania, which triggered big losses for some retail investors and prompted Robinhood Markets, whose app was used by many of the traders, to raise $3.4 billion to cover collateral demands.

Treasury Secretary Janet Yellen has also called for a meeting of U.S. financial regulators including the SEC, taking her first public step to address the tumult.

“Secretary Yellen believes the integrity of markets is important and has asked for a discussion of recent volatility in financial markets and whether recent activities are consistent with investor protection and fair and efficient markets,” the Treasury Department said in a late Tuesday statement.

While the SEC doesn’t regulate social media or message boards, the agency has brought cases against people accused of making false claims about stocks online. In one case in 2000, the agency went after a 15-year-old for buying microcap stocks and then hyping the shares before quickly selling them for a profit. The teenager agreed to repay more than $270,000 in profit to resolve the allegations. In December, the SEC sued a day trader for planting false rumors about companies.

SEC investigations often take months or even years to complete so it’s likely that the GameStop tumult will be long over by the time the probe wraps up. Still, the agency’s findings could have implications for the broader retail market and lead to policy changes for short-selling, trade settlement, online apps and disclosure rules.

The SEC is also looking at how brokerages handled increased volumes and decided to restrict trading during the surge, according to the people. The agency is looking into whether the firms complied with rules and were consistent in how they made disclosures to their clients across the board when limiting transactions.