The US Securities and Exchange Commission waded into the battle between small investors and Wall Street hedge funds on Friday, warning both brokerages and the pack of social media traders that it was closely monitoring potential wrongdoing.

The week-long slugfest, pitching the little man against major financial institutions, has inflated stocks of a number of previously beaten-down companies, drawn outrage from politicians and calls for action from regulators.

It took off again on Friday as brokers including Robinhood eased some of the restrictions they had placed on trading, allowing video game store chain GameStop and headphone maker Koss Corp to jump 50% each in value.

In a rare joint statement the SEC, traditionally cautious with public pronouncements, said it was working closely with other regulators and stock exchange “to ensure that regulated entities uphold their obligations to protect investors and to identify and pursue potential wrongdoing”.

“The Commission will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities,” it added.

The showdown between small-time traders and professional short-sellers has also attracted the scrutiny of Congressional lawmakers, the White House and is being probed by the New York Attorney General.

Global equity markets have also suffered as funds were forced to sell some of their best-performing stocks, including Apple Inc, to cover billions of dollars of losses. The benchmark S&P 500 was down 0.6% on Friday.

“The (GameStop) rally will continue for as long as these trading platforms allow people to buy these stocks,” said Joe Donohue, an investor in Stocktwits, a social media platform for equity investors.

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