Statement of SEC Regarding Recent Market Volatility • Hacker News Board

Re: Statement of SEC Regarding Recent Market Volatility

#141

Post by blackearl » Fri, Jan 29, 2021, 3:47 PM UTC

TeMPOraL wrote: post #49

moolcool wrote: post #40

Earlier quoted context omitted.

I can't find any documentation that a short squeeze is illegal. Can you?

It's in the SEC rules. "Although some short squeezes may occur naturally in the market, a scheme to manipulate the price or availability of stock in order to cause a short squeeze is illegal." From https://www.sec.gov/investor/pubs/regsho.htm . It's an open question whether this case is more of a natural occurrence or "a scheme to manipulate", given that it's all randos who found a Schelling point and are now hyping…

If the SEC isn't going to litigate the naked short selling that preceded this, it's really hard to not cry hypocrisy.

Re: Statement of SEC Regarding Recent Market Volatility

#142

Post by RurouniK » Fri, Jan 29, 2021, 3:47 PM UTC

jdefr89 wrote: post #120

RurouniK wrote: post #37

Apparently when retail investors win it's "Manipulative trading activity"... I'm so glad Bitcoin and DeFi was invented in my lifetime and I can be protected by maths and computer science instead of a three letter agency.

Yea, unfortunately they isn't really the case right now as cash is still king and crypto is another gamble. Not to mention, who do you think could buy better hardware? Us or them? There isn't really such thing as decentralized. Its just the authority gets shifted around but the same issues can still show up.

Crypto is a technology not a gamble. It attracts gamblers but it's a technology and it's already 12 years old. I could say that an open decentralized permissionless network that has moved trillions of dollars for the last 12 years is resilient enough for me.

Re: Statement of SEC Regarding Recent Market Volatility

#143

Post by Dirlewanger » Fri, Jan 29, 2021, 3:47 PM UTC

dkrich wrote: post #75

There’s a long history of similar occurrences that follow along a common line: whatever appears to support individual investors will be the path taken by politicians and regulatory bodies. Right now it appears that the public wants to be able to trade on their terms because there is this narrative that the little guy is finally sticking it to the big bad hedge funds. In reality there is probably very little truth to…

>nobody blames the speculators

The hedge funds are the speculators in this case. They're playing a dangerous game where you can short more stock than what actually exists. Why this is allowed? Who the fuck knows.

Re: Statement of SEC Regarding Recent Market Volatility

#144

Post by josephorjoe » Fri, Jan 29, 2021, 3:48 PM UTC

malwarebytess wrote: post #119

gjsman-1000 wrote: post #3

"The Commission will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities. In addition, we will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws. Market participants should be careful to avoid such activity." This shoul…

Robinhood says that they basically couldn't fulfil the buy orders because they ran out of money, or couldn't fulfil the orders without breaking the rest of the platform. I imagine whatever the reason there's going to be lawsuits.

Whatever else happens, Robinhood should not survive this.

They clearly violated their customers' trust, so their customers should leave them.

And I will be completely unsurprised if when the dust settles it turns out they acted illegally.

Also, they suck at lying.

Re: Statement of SEC Regarding Recent Market Volatility

#145

Post by pardonmesir » Fri, Jan 29, 2021, 3:48 PM UTC

OscarCunningham wrote: post #25

There's been some speculation that what WSB are doing could be market manipulation or otherwise illegal. The fact that this statement only mention retail investors in the context of protecting them makes me suspect that the SEC's not going for it.

what are you talking about? the real fraud and market manipulation was perpetrated by Robinhood and Shitadel when they shut peoples’ ability to buy the stock while still allowing it to be sold. They know this is illegal but they were betting on the fines being less than the losses. They need to be taught a real lesson. Those responsible for this intentional, flagrant violation of the most basic free market principles should go.to.jail.

Re: Statement of SEC Regarding Recent Market Volatility

#146

Post by willcipriano » Fri, Jan 29, 2021, 3:49 PM UTC

OscarCunningham wrote: post #96

TeMPOraL wrote: post #49

Earlier quoted context omitted.

It's in the SEC rules. "Although some short squeezes may occur naturally in the market, a scheme to manipulate the price or availability of stock in order to cause a short squeeze is illegal." From https://www.sec.gov/investor/pubs/regsho.htm . It's an open question whether this case is more of a natural occurrence or "a scheme to manipulate", given that it's all randos who found a Schelling point and are now hyping…

If I were the short-sellers I'd be a bit aggrieved at the SEC not going after WSB here. People keep saying that the hedge funds 'knew what they were getting into', and are therefore fair game. But they could well have thought that they were protected by this regulation. It's unlucky for them that they got squeezed by loveable retail investors rather than another hedge fund that the SEC would have no qualms about pros…

The shorters should form a class action and sue wall street bets, I'm sure a 5 dollar check in 3 years and a year of free stonk advice will cover it right?

Re: Statement of SEC Regarding Recent Market Volatility

#147

Post by avereveard » Fri, Jan 29, 2021, 3:49 PM UTC

TeMPOraL wrote: post #49

moolcool wrote: post #40

Earlier quoted context omitted.

I can't find any documentation that a short squeeze is illegal. Can you?

It's in the SEC rules. "Although some short squeezes may occur naturally in the market, a scheme to manipulate the price or availability of stock in order to cause a short squeeze is illegal." From https://www.sec.gov/investor/pubs/regsho.htm . It's an open question whether this case is more of a natural occurrence or "a scheme to manipulate", given that it's all randos who found a Schelling point and are now hyping…

"scheme to manipulate" is the keyword here, patting each other on the back for riding market volatility on a forum about stocks isn't neither novel nor illegal.

it would be quite different if they were to coordinate the sale moment or the sale prices; for the latter, I don't see much coordination beyond memes, for the first SEC might have a point and there's many posts walking a thin line suggesting friday will be the day.

however this is a billion dollar operation which include many players and wide interference by multiple actors ranging from unclear to blatant business relationships; I wouldn't be surprised by anonymous plants joining wsb trying to stir up a movement and coordinate sales/prices to create a solid case where there is just a feeble suspicion; and as a matter of fact there has been quite many fresh accounts (either low karma, no posts in a long time, no posts at all etc) joining in just to propose to hold until a certain price or date is reached.

Re: Statement of SEC Regarding Recent Market Volatility

#148

Post by seigando » Fri, Jan 29, 2021, 3:49 PM UTC

OscarCunningham wrote: post #96

TeMPOraL wrote: post #49

Earlier quoted context omitted.

It's in the SEC rules. "Although some short squeezes may occur naturally in the market, a scheme to manipulate the price or availability of stock in order to cause a short squeeze is illegal." From https://www.sec.gov/investor/pubs/regsho.htm . It's an open question whether this case is more of a natural occurrence or "a scheme to manipulate", given that it's all randos who found a Schelling point and are now hyping…

If I were the short-sellers I'd be a bit aggrieved at the SEC not going after WSB here. People keep saying that the hedge funds 'knew what they were getting into', and are therefore fair game. But they could well have thought that they were protected by this regulation. It's unlucky for them that they got squeezed by loveable retail investors rather than another hedge fund that the SEC would have no qualms about pros…

Oh dear, those poor hedge funds.

Re: Statement of SEC Regarding Recent Market Volatility

#149

Post by throwaway4good » Fri, Jan 29, 2021, 3:49 PM UTC

vinceguidry wrote: post #67

throwaway4good wrote: post #39

Earlier quoted context omitted.

I know of cases from the Danish market where the financial service authorities went for people who had tried driving the price up in a pump and dump scheme for a small penny stock. Using internet forums and a couple of trading accounts. They made a few thousand dollars and got months in jail for it. The problem with wsb is that it has gotten so big and there are too many involved at this point.

It's not really that the government can't go after WSB. Sure they're not going to prosecute 2 million degenerates, but it's not like they can't round up 50 of the big names to make a statement. It's that there's really no appetite in the federal government for going after retail traders. Retail trading as an industry took a very long time to build and ham-fisted enforcement could tank it harder than a few lawsuits ev…

Yes. This stuff (market manipulation using internet hype) is so easy to do that they need to make an example.

I am very certain that most of retail traders who buy GME at 400 will end up losing money.

Re: Statement of SEC Regarding Recent Market Volatility

#150

Post by dkrich » Fri, Jan 29, 2021, 3:49 PM UTC

BoorishBears wrote: post #127

dleslie wrote: post #116

Earlier quoted context omitted.

The FOMO is palpable. There's a hurried rush of small investors hoping to turn their meagre savings into a big win, backed by the anxiety that if they don't try then they'll forever regret missing their one and only chance at a comfortable life. This sort of event would be less likely if America's wealth disparity weren't so grotesquely skewed.

It boggles the mind people think hedge funds can't profit off a mad rush like this...

I mean do people really believe Robinhood traders are moving billions of dollars of stock a day? Most admit that they aren’t selling and buying at higher and higher levels. That translates to very little cash to buy more. There is absolutely no way that these moves can be attributed to retail traders or short squeezes. The narrative that these are retailers causing every significant move higher and with every move the shorts are losing more and more is actually causing this bubble.