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SEC charges eight social media influencers in $100M stock manipulation scheme

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Re: SEC charges eight social media influencers in $100M stock manipulation scheme

#11

Post by dclusin »

satellites wrote: post #8

I'm a noob when it comes to stock trading rules, but can someone explain how this is different than what Jim Cramer does on his show? Cramer has been exposed for knowingly giving people bad stock trading advice. Is it just that Cramer didn't do a blatantly obvious pump-and-dump like these influencers did?

Jim is most likely not trading the securities directly. The money he makes is from his tv contracts and other non-securities trading business probably. Maybe being paid by the companies to shill for them.

Re: SEC charges eight social media influencers in $100M stock manipulation scheme

#12

Post by pmart123 »

satellites wrote: post #8

I'm a noob when it comes to stock trading rules, but can someone explain how this is different than what Jim Cramer does on his show? Cramer has been exposed for knowingly giving people bad stock trading advice. Is it just that Cramer didn't do a blatantly obvious pump-and-dump like these influencers did?

A lot comes down to subtle language syntax. For instance, you can say "we target 12% returns," but you can't say "we guarantee 12% returns." You can say "we out-performed the market by over 3% a year for each of the past ten years," but you can't say "we're going to out-perform the market because we have the past ten years." You can say "company X is a great business, and the stock looks cheap here," but you can't say "company X is a can't miss investment and an automatic double at this price."

Re: SEC charges eight social media influencers in $100M stock manipulation scheme

#13

Post by [deleted] »

satellites wrote: post #8

I'm a noob when it comes to stock trading rules, but can someone explain how this is different than what Jim Cramer does on his show? Cramer has been exposed for knowingly giving people bad stock trading advice. Is it just that Cramer didn't do a blatantly obvious pump-and-dump like these influencers did?

[deleted]

Re: SEC charges eight social media influencers in $100M stock manipulation scheme

#14

Post by kobalsky »

satellites wrote: post #8

I'm a noob when it comes to stock trading rules, but can someone explain how this is different than what Jim Cramer does on his show? Cramer has been exposed for knowingly giving people bad stock trading advice. Is it just that Cramer didn't do a blatantly obvious pump-and-dump like these influencers did?

I'm guessing that kramer and everyone around him is under the radar for taking opposite trades to what he's pitching, otherwise it would be a farce.

Pump and dumpers get nailed to the wall because they sell while they are telling everyone to buy. They are not providing bad financial advise, they are defrauding people.

Re: SEC charges eight social media influencers in $100M stock manipulation scheme

#15

Post by rubyn00bie »

satellites wrote: post #8

I'm a noob when it comes to stock trading rules, but can someone explain how this is different than what Jim Cramer does on his show? Cramer has been exposed for knowingly giving people bad stock trading advice. Is it just that Cramer didn't do a blatantly obvious pump-and-dump like these influencers did?

They didn’t disclose they were selling. Specifically they cite, 1. taking positions then 2. telling their audiences to buy (long) the same stock and then the important part selling when volume and/or price increases without disclosing it.

Ex.

1. Buy crap stock “XYZ” with a low float (prone to volatile spikes with volume).

2. Tell audience to buy crap stock.

3. Sell crap stock.

That’s manipulation and the SEC don’t take kindly to it. Cramer presumably does long things he talks about, or doesn’t pretend he will, and isn’t immediately selling it after discussing it on his show.

Re: SEC charges eight social media influencers in $100M stock manipulation scheme

#16

Post by pmart123 »

pmart123 wrote: post #12
satellites wrote: post #8

I'm a noob when it comes to stock trading rules, but can someone explain how this is different than what Jim Cramer does on his show? Cramer has been exposed for knowingly giving people bad stock trading advice. Is it just that Cramer didn't do a blatantly obvious pump-and-dump like these influencers did?

A lot comes down to subtle language syntax. For instance, you can say "we target 12% returns," but you can't say "we guarantee 12% returns." You can say "we out-performed the market by over 3% a year for each of the past ten years," but you can't say "we're going to out-perform the market because we have the past ten years." You can say "company X is a great business, and the stock looks cheap here," but you can't sa…

You also can't promote a stock or position and do the opposite. For instance, if you ran a popular YouTube channel, you can't buy stock X before you post about why you own it, then post the promotional piece, and sell your position into your listener's buying it. If you are paid by the company, you would have to disclose this too, etc.

Re: SEC charges eight social media influencers in $100M stock manipulation scheme

#17

Post by time_to_smile »

satellites wrote: post #8

I'm a noob when it comes to stock trading rules, but can someone explain how this is different than what Jim Cramer does on his show? Cramer has been exposed for knowingly giving people bad stock trading advice. Is it just that Cramer didn't do a blatantly obvious pump-and-dump like these influencers did?

> didn't do a blatantly obvious

For any crime it not being "blatantly obvious" is pretty essential to it not being prosecuted. I'm no fan of Jim Cramer, but he makes enough money just giving bad advice that there's no reason for him to also be secretly profiting from it illegally. In addition he's high profile enough that I'm sure plenty of people have looked into it hoping to find something.

But if he was secretly profiting form it illegally then that illegal activity would have to be made "blatantly obvious" in order for him to be convicted, and the federal government doesn't like prosecuting unless they're near certain of a conviction.

These influencers were performing an easy to observer and therefore easy to prosecute crime, which is why they are being charged.

Re: SEC charges eight social media influencers in $100M stock manipulation scheme

#18

Post by robbitt »

satellites wrote: post #8

I'm a noob when it comes to stock trading rules, but can someone explain how this is different than what Jim Cramer does on his show? Cramer has been exposed for knowingly giving people bad stock trading advice. Is it just that Cramer didn't do a blatantly obvious pump-and-dump like these influencers did?

It is all about how one discloses conflicts of interest with suggestions (aka ownership interests). Key phrase from the statement "without ever having disclosed their plans to dump the securities".

Re: SEC charges eight social media influencers in $100M stock manipulation scheme

#19

Post by jcampbell1 »

satellites wrote: post #8

I'm a noob when it comes to stock trading rules, but can someone explain how this is different than what Jim Cramer does on his show? Cramer has been exposed for knowingly giving people bad stock trading advice. Is it just that Cramer didn't do a blatantly obvious pump-and-dump like these influencers did?

Cramer doesn’t invest in individual stocks, thus he has no conflicts of interest and wide 1st amendment protections. The important thing is to not lie about your financial interests. It is perfectly fine to take a short position, announce it, then proceed to trash the company’s management. It is fine to pump a stock if you disclose you have a position.

The key issue is:

“ the individuals regularly sold their shares without ever having disclosed their plans to dump the securities while they were promoting them.”

Re: SEC charges eight social media influencers in $100M stock manipulation scheme

#20

Post by amanj41 »

devmunchies wrote: post #10
Simon_O_Rourke wrote: post #5

I'm rarely a cheerleader for the SEC, but their work this week alone has been marvellous. Delighted to see these guys brought to book.

They jumped the gun on SBF. Should have let him testify in congress. The timing makes it look like they didn’t want him to talk. May not be the case but it’s what it looks like.

Have seen this conspiracy theory propounded by several people now. Two things:

1) SBF refused to testify right before he was due to anyways: https://www.cnbc.com/2022/12/12/former-ftx-ceo-sam-bankman-f...

2) The charges he is looking at are so serious, I have a hard time believing it would matter that much whether he racked up one more charge of lying under oath

Edit: formatting

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