The US Securities and Exchange Commission has waded into the battle between small investors and Wall Street hedge funds, 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 today as brokers including Robinhood eased some of the restrictions they had placed on trading, allowing video game store chain GameStop and headphone maker Koss 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, to cover billions of dollars of losses.
"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.
"Once they shut it down - if they do - then there is going to be some selling. But until such time, the Robinhood/Reddit people are going to have their way with these stocks."
Robinhood said on its website that it was easing some restrictions, but still not allowing purchases of fractional shares in GameStop and 12 other companies, effectively meaning smaller investors have to bet more in order to buy in further to the trade.
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The brokerage, which has said its hand was forced by the surge in market volatility, was also maintaining numerical limits on the number of shares any one account could hold in each of the companies, further hampering players with existing positions from betting on more gains.
In one victory for the retail pack, short-seller Andrew Left, who runs Citron Research and sparked the slugfest with his call against GameStop, said in a YouTube video that his company would no longer publish short-selling research.
Facebook took down a popular Wall Street discussion group, Robinhood Stock Traders, in a move its founder said was an unjustified response to the market moves.
On Reddit forum WallStreetBets, whose almost 6 million members are seen as having driven the rallies, GameStop and AMC remained overwhelmingly favored stocks.
JP Morgan has named 45 stocks that may be susceptible to similar "fragility events" in days to come, including real estate company Macerich, restaurant chain Cheesecake Factory and clothing subscription service Stitch Fix.
Like GameStop, AMC and American Airlines Group, all have high "short" interest ratios, making them subject to a squeeze on funds that have bet on the shares falling.
The retail frenzy also appeared to spread into other asset classes today, with Bitcoin jumping as much as 14% to a two-week high after Tesla chief Elon Musk tagged the cryptocurrency in his Twitter biography.
A tweet from Mr Musk, who has a record of making market-moving comments on the site, had fueled a 50% surge in GameStop shares on Tuesday.
Robinhood said today it had also temporarily disabled a feature on its app that allows users to buy crypto securities instantly.
The chief executive of the London Stock Exchange, David Schwimmer, said regulators needed to be mindful of when the line was crossed into market manipulation.
"We've seen disruption by new technology and social media in a number of other industries so in some ways it’s not surprising to see it in financial markets," he said.
"I will let the regulators determine whether there’s a need to take a careful look at this if it moves into the realm of market manipulation ," Mr Schwimmer added.
Robinhood has been one of the hottest venues in the retail-trading frenzy but its sudden curbs on buying set off a raft of online protests as the firm tapped credit lines to ensure it could continue trading.
The brokerage also said it had raised more than $1 billion from its existing investors, having been strained by the high volumes and volatility of trading this week.
A website on the short squeeze strategy set up by one WallStreetBets participant, isthesqueezesquoze.com/, told traders with Robinhood accounts to "find a new broker asap", listing rivals Vanguard, Ameritrade and Fidelity.
Both Ameritrade and Charles Schwab placed some restrictions on trade on Thursday. Fidelity says it has not limited trading in the stocks.
Venture capital investor Chamath Palihapitiya named SoFi, CashApp and Public as alternatives to Robinhood in a tweet late on Thursday. Palihapitiya is planning to take SoFi public through a reverse merger in Social Capital Hedosophia Holdings Corp V.