Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Statement of SEC Regarding Recent Market Volatility

sec.gov

Post reply on HN
Print view View original

61–70 of 906 posts

Re: Statement of SEC Regarding Recent Market Volatility

#61

Post by jeffbee »

Dirlewanger wrote: post #53
jeffbee wrote: post #32

Earlier quoted context omitted.

Could be? It's an open, publicly-documented market manipulation event. How can there be any question about it? You might decide that this kind of manipulation is OK due to it's stated goals, but that doesn't make it not manipulation.

Ever think that they just like the stock?

That's the thing: there is NO QUESTION as to the motives of the r/wsb traders. They are overtly conspiring to raise the price of shares in order to force specific parties to buy it. That's manipulation!

Re: Statement of SEC Regarding Recent Market Volatility

#62

Post by ericmay »

jeffbee wrote: post #32
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.

Could be? It's an open, publicly-documented market manipulation event. How can there be any question about it? You might decide that this kind of manipulation is OK due to it's stated goals, but that doesn't make it not manipulation.

Which is one take, certainly. But the problem is once you say that this is a market manipulation event you run into other issues.

Is going on CNBC and talking about the strength of a company that you invested in market manipulation? Before this blew up you certainly had more reach.

Is posting "research" or holding a conference call and telling people a company is garbage while you have the company shorted market manipulation? What about when you short a company and sell a ton of shares to induce panic? What about algorithms that are created to trade shares to reach a certain profitable price based on internal holdings/analysis?

Here's another thing - if WallStreetBets was incorporated into a hedge fund and took a huge long position is that market manipulation? It seems to me the main difference is that they aren't behind closed doors talking privately in a legal fiction called a company that is really the problem here...

You have to define what you mean by manipulating the market and apply that equally under the eyes of the law. The fact that this was done publicly makes it all the more interesting. Had it been done behind closed doors (like so many things are on Wall Street) it would have been an open and shut case, but it wasn't.

So sure, let's say it's a market manipulation event. Ok. Can you tell me what isn't a market manipulation event?

Re: Statement of SEC Regarding Recent Market Volatility

#63

Post by snet0 »

dageshi wrote: post #36
rich_sasha wrote: post #20

Earlier quoted context omitted.

From a distance, this is all a storm in a teacup. It's a small handful of stocks, and every single one in S&P500 is waaaay bigger, in terms of trading volumes and market cap. Anything can happen, but in finance terms, this is tiny so far.

If that's the case I'm kinda confused why trading platforms keep banning trades in these particular meme stocks?

Because of the volatility of the stock, I believe. 100->300->200->300 in the space of no time at all. You could've watched the stock just jump all over the place in real-time, pretty much.

Re: Statement of SEC Regarding Recent Market Volatility

#64

Post by davio »

rich_sasha wrote: post #20
dls2016 wrote: post #11

What are the odds of a flash crash in the next week as a result of this activity? The system of banks and market makers and clearing houses is a always way more coupled than the the owners let on... history shows they don't know how to risk manage these sorts of situations.

From a distance, this is all a storm in a teacup. It's a small handful of stocks, and every single one in S&P500 is waaaay bigger, in terms of trading volumes and market cap. Anything can happen, but in finance terms, this is tiny so far.

GME has the market cap of a S&P300 sized company right now.

Re: Statement of SEC Regarding Recent Market Volatility

#65

Post by ceejayoz »

jeffbee wrote: post #61
Dirlewanger wrote: post #53

Earlier quoted context omitted.

Ever think that they just like the stock?

That's the thing: there is NO QUESTION as to the motives of the r/wsb traders. They are overtly conspiring to raise the price of shares in order to force specific parties to buy it. That's manipulation!

It's manipulation, but is it illegal manipulation?

Remember, it's perfectly legal for a hedge fund to open a short position, and then release a big expose of the company that tanks its stock price.

For a prominent recent example: https://hindenburgresearch.com/nikola/

Re: Statement of SEC Regarding Recent Market Volatility

#66

Post by nend »

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.

Doesn't "retail investors" refer to any individual, non-professional, investor? Sounds like to me the SEC is warning any party involved in this, RH and WSB included.

Re: Statement of SEC Regarding Recent Market Volatility

#67

Post by vinceguidry »

throwaway4good wrote: post #39
ChrisRR wrote: post #29

Earlier quoted context omitted.

The big traders probably have friends in high places, so I suspect they're going after WSB and not wall street who caused the issues in the first place.

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 ever could.

Make no mistake, this was going to happen eventually. There's infinite ability to gather information, infinite ability to share it. Retail collusion was inevitable. The people who built the industry knew it was going to happen. They prepared for it. Everyone, including the SEC, knew it was only a matter of time before something like this happens.

Denmark did that because there's much greater financial regulatory capture than there is here.

Re: Statement of SEC Regarding Recent Market Volatility

#69

Post by datavirtue »

balozi wrote: post #46
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.

Well... they will start by redefining "market manipulation" to encompass all activity they now consider disruptive (also suitably redefined). This is America today.

This. Man walks into a hardware store and buys a Milwaukee drill. Bam, supply reduced, market manipulated.

Re: Statement of SEC Regarding Recent Market Volatility

#70

Post by [deleted] »

ceejayoz wrote: post #65
jeffbee wrote: post #61

Earlier quoted context omitted.

That's the thing: there is NO QUESTION as to the motives of the r/wsb traders. They are overtly conspiring to raise the price of shares in order to force specific parties to buy it. That's manipulation!

It's manipulation, but is it illegal manipulation? Remember, it's perfectly legal for a hedge fund to open a short position, and then release a big expose of the company that tanks its stock price. For a prominent recent example: https://hindenburgresearch.com/nikola/

[deleted]
Post reply on HN