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Yellen calls meeting on GameStop market frenzy

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U.S. Treasury Secretary Janet Yellen is calling a meeting on the market frenzy sparked by shares in GameStop, AMC and others favored by a group of investors on the web site Reddit.

The Treasury said Tuesday Yellen will meet with the heads of major U.S. regulators including the Securities and Exchange Commission and the Federal Reserve.

It's her first public effort to address the market ruckus after amateur traders on the WallStreetBets Reddit forum took on the big hedge funds of Wall Street.

It sent shares of video-game retailer GameStop up to a dizzying high of over $480 last week.

The stock crashed back down to earth on Tuesday, along with Bed Bath & Beyond, BlackBerry, and the price of silver.

The wild trend raised questions about potential risks to the financial services industry, and prompted professional market watchers to call for a regulatory crackdown.

Last week, the SEC warned that "extreme stock price volatility" could "expose investors to rapid and severe losses and undermine market confidence."

According to a document seen by Reuters, Yellen consulted with ethics lawyers before calling a meeting with regulators and received clearance to do so.

Reuters reported earlier this week that Yellen has received hundreds of thousands of dollars in speaking fees from hedge fund Citadel, one of the key players in the GameStop saga.

An ethics agreement requires Yellen to seek authorization before getting involved in matters related to Citadel as well as major banks like Citigroup and Barclays.

A Treasury official who requested anonymity said her meeting will be held this week, possibly as early as Thursday.