Former SEC Chair Jay Clayton says GameStop trading was not a pump-and-dump scheme and praises transparency from 'Mr. Kitty'

• Former SEC Chair Jay Clayton told CNBC the GameStop trading frenzy was not a pump-and-dump scheme.
• Clayton said social-media investors including "Roaring Kitty" were "very transparent about what they were doing."
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Former Securities and Exchange Commission Chairman Jay Clayton told CNBC on Friday trading activity during the GameStop market frenzy was not a "pump-and-dump scheme" and that Thursday's hearing demonstrated transparency from social-media investors.

Clayton said the SEC would likely take a look at whether there was coordinated behavior to manipulate GameStop's stock price, which soared 1,022% during its January rally, but that "the quick answer is" no pump-and-dump scheme was present.

"The overall participation in this, it was fairly transparent what was going on here," Clayton said. "I must admit to being entertained by Mr. Kitty. You saw that people were very transparent about what they were doing and why they were doing it, which was fairly interesting."

During Thursday's hearing, Keith Gill, also known as Roaring Kitty, said his reasoning for buying GameStop stock and sharing his position was based purely on his belief that the company was dramatically undervalued and that he was clear in explaining his fundamental case for buying GameStop to his social-media followers.

Gill told the House Financial Services Committee that he still liked GameStop's stock and would buy it at its current price of about $43.