By Katanga Johnson and Chris Prentice

WASHINGTON, (Reuters) – The U.S. market functioned well in January’s GameStop volatility (NYSE:), while short selling wasn’t the primary cause for the unprecedented rise of the’meme Stock,’ according to a long-awaited Securities and Exchange Commission report (SEC).

This Monday’s report examines how commission-free retail brokerages helped amateur traders drive shares of GameStop, and other meme stocks to record highs. It also reveals the strategies used by hedge funds against these stock prices.

Despite the volatility intense, many brokerages stopped trading in affected stocks. This infuriated retail traders and triggered outrage among policymakers.

The SEC said that despite the unusual sequence of events, it concluded that the fundamental plumbing of the market was still sound. According to the report, GameStop stock surge was driven by positive sentiment about its videogame retail business GameStop and not short-selling dislocations.

With the understanding that the seller will purchase the shares and return the loaned shares to the lender later, short sellers can borrow shares from brokers. The short seller may buy back the shares at a price lower than what they paid, locking in profits.

Stocks that are heavily shorted soar when they do, short sellers must buy them back at higher prices in order to sell their shares. This is known as “short squeeze”

However, the SEC determined that it was not buying-to-cover that caused the GameStop stock’s price rise over the past weeks.

A popular belief that certain hedge funds were “naked” shorting the stock, which is selling the shares to the public without borrowing the shares, was also disproved by it. SEC denied that there was any evidence.

The report leaves out several questions like whether or not bad actors used social media to create positive sentiment about GameStop. Or whether the hedge funds attempted to press retail brokers to limit trading in GameStop. This is something all involved deny.

A SEC official stated that it couldn’t discuss misconduct in the report, which could lead to enforcement actions.

Congress was informed earlier in the year by Gary Gensler, the chair of the agency, that it would also address issues such as short selling disclosures and game-like trading prompts. He also mentioned the practice by brokers to send customer orders for a fee to wholesale market makers.

Gensler, in a Monday statement, stated that “January’s Events gave us the opportunity to think about how we can further unsere efforts to make equity markets fair, orderly and efficient.”