GameStop: City watchdog fires warning as trading frenzy spreads

The UK's financial regulator has warned it is closely watching trading activity in the wake of frenzied share dealing in GameStop and other companies.

Amid soaring prices fuelled by social media chat on sites like Reddit, the Financial Conduct Authority fired a warning shot at potential lawbreakers.

Traders should "ensure they are familiar with all regulations, including market abuse," the FCA said.

GameStop is the focus of a trading war between amateurs and Wall Street pros.

Shares in the US bricks and mortar video games retailer have soared as much as 700% in the past week, only to fall sharply when some trading platforms temporarily restricted access.

Official trading will resume in New York later on Friday, but limited pre-market dealing overnight suggests the volatility will continue, with GameStop rising about 60% after a sharp falls.

UK traders have joined in the share trading chat on forums on Reddit, Facebook and other sites, raising concerns about misinformation and share ramping.

London-listed companies have also been the focus of social media attention, including publisher Pearson and cinema operator Cineworld, although the share price movements were minimal compared with the GameStop surge.