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‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

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Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#91

Post by uniqueid »

outoftheabyss wrote: post #12

I find it nauseating seeing the financial press, politicians and big time players claiming that their actions and ‘concern’ is based on not wanting retail investors to lose money as a stock peaks. Be honest, you don’t give a shit and even if this was your motivation, people have autonomy in the markets, although sometimes naive, they know the risks. Stop treating retail investors as children that need saving when in…

The internet is full of vaguely conspiratorial takes involving 'elites' and I believe it has more to do with internet culture than the facts behind the 2008 financial crisis alone.

A theory recently occurred to me that I think is part of the explanation:

The rise of blogs and sites like Youtube gave independent journalists reach. Independents vastly outnumber people working in mainstream media. Yet mainstream media has more resources, more access to experts and higher production values.

So how can some rando with a webcam convince the public to watch them instead of watching 60 Minutes or reading the NYT? They can do it with the 'elites' narrative: 'Read my blog because the MSM is a tool of the elites and they only tell lies!'

And soon enough the only mainstream journalists the internet trusts are the ones who demagogue like Glen Greenwald or Tucker Carlson.

But as to the actual comment to which I am replying: it seems like the 'retail investors' who lost money on this WSB thing are suggestible marks. They enriched the kind of 'elite' they hate so much because they believed what they read on Reddit.

So it's probably good, in future, if someone treats them as children and protects them from themselves.

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#92

Post by fractionalhare »

JumpCrisscross wrote: post #39
snicksnak wrote: post #29

Why is he always referred to as 'Roaring Kitty' from youtube when he is undoubtedly better known as DeepFuckingValue from reddit? Because of the `F-Word`? It will be interesting how congress will refer to him during the hearings, considering that reddit also has to appear and not youtube, so his alter ego DeepFuckingValue should be in focus?

> Why is he always referred to as 'Roaring Kitty' from youtube when he is undoubtedly better known as DeepFuckingValue from reddit? Makes sense for this case. Public messaging versus publicly visible but arguably private conversation.

I think it might be even simpler than that - "Roaring Kitty" is printable in a mainstream news publication, "DeepFuckingValue" is not :)

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#93

Post by Tycho »

fractionalhare wrote: post #78
Animats wrote: post #33

Earlier quoted context omitted.

Taleb made money in 2008 by buying options that were way out of the money and hoping for a crash. All other years, his fund lost money. That strategy would have lost money over the last decade, because there wasn't a crash. Whether that strategy is a net win over a business cycle isn't known. Taleb's funds never published their full results.

I guess you're probably talking about Universa, which Taleb is closely affiliated with? Taleb also ran his own shop Empirica for five years, 2000 - 2005. It beat the market on an absolute basis in year one (incidentally, during the dotcom crash) then had mostly negative results all other years. I don't specialize in derivatives so I can't speak to how compelling his industry work is versus his writing. But my underst…

This paper talks about a strategy of buying OOTM options and the massive returns it would (occasionally) generate, and how to properly judge such a strategy.

https://arxiv.org/pdf/1401.2524.pdf

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#94

Post by rocmcd »

compiler-guy wrote: post #60
ra7 wrote: post #20

Earlier quoted context omitted.

He wasn't giving advice as a registered financial advisor though. I don't think anybody even knew he was one until WSJ published a piece on him. How does this hold up in courts?

If you have a license, you have responsibilities as defined by the regulations involved, regardless of whether the people you interact with know you have those responsibilities or not.

I wonder if this has been tested in court before. If I'm a licensed medical doctor and then I post under a pseudonym online on things medical-related (while not claiming to be a doctor or claiming to know anything about what I'm talking about), would it be possible to be sued for medical malpractice for that advice? That seems questionable.

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#95

Post by ChicagoBoy11 »

uniqueid wrote: post #91
outoftheabyss wrote: post #12

I find it nauseating seeing the financial press, politicians and big time players claiming that their actions and ‘concern’ is based on not wanting retail investors to lose money as a stock peaks. Be honest, you don’t give a shit and even if this was your motivation, people have autonomy in the markets, although sometimes naive, they know the risks. Stop treating retail investors as children that need saving when in…

The internet is full of vaguely conspiratorial takes involving 'elites' and I believe it has more to do with internet culture than the facts behind the 2008 financial crisis alone. A theory recently occurred to me that I think is part of the explanation: The rise of blogs and sites like Youtube gave independent journalists reach. Independents vastly outnumber people working in mainstream media. Yet mainstream media h…

Tyler Cowen has a book that addresses this, but I believe it is even less complicated than you make it sound: Ultimately, to justify the incredible production value, major outlets need to appeal to a wide audience to make the economics work, whereas random dude on YouTube needs to appeal to a LOYAL audience. In an age when switching costs to consumers is something trivial, big behemoths will only survive if they can continue to modestly appeal to a large enough base, and tiny players can only exist if they can find a niche to firmly segment themselves in. What you end up with is small producers with incredibly fringe productions and big, established, heavy players who take on less and less risk so they can appeal to a very broad base.

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#96

Post by detaro »

JumpCrisscross wrote: post #37
ra7 wrote: post #20

Earlier quoted context omitted.

He wasn't giving advice as a registered financial advisor though. I don't think anybody even knew he was one until WSJ published a piece on him. How does this hold up in courts?

> How does this hold up in courts? Surprised they went for the courts instead of arbitration. Securities arbitration is notoriously biased towards the client. And even an allegation makes it onto the individual’s permanent regulatory record. Smells like a PR stunt.

Don't you need some kind of established relationship to go for arbitration? I.e. sure, against your advisor or broker that makes sense, but against a random person you weren't a client of?

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#97

Post by sokoloff »

newacct583 wrote: post #44
sokoloff wrote: post #23

Earlier quoted context omitted.

Is the assertion that DFV, by being a licensed broker, is obligated to speak on a web forum to correct misinformation that they see there?

Of course he wasn't "obligated". But the guy was (1) a legitimate expert on the details of how his trading worked and (2) spoke profusely and at length about all the other details of his investments. He wasn't silent. At all. Yet he was silent as his investment conveniently went through the roof, driven by a huge misunderstanding propagated within the very community where he did almost all his profuse speaking. And t…

An alternative point of view is that he was a genuine (relatively) long-term believer in Gamestop and he steered clear of all conversations where nonsense was being spouted. I don't think he has any obligation to engage there and I suspect the courts will find the same.

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#98

Post by newacct583 »

sokoloff wrote: post #97
newacct583 wrote: post #44

Earlier quoted context omitted.

Of course he wasn't "obligated". But the guy was (1) a legitimate expert on the details of how his trading worked and (2) spoke profusely and at length about all the other details of his investments. He wasn't silent. At all. Yet he was silent as his investment conveniently went through the roof, driven by a huge misunderstanding propagated within the very community where he did almost all his profuse speaking. And t…

An alternative point of view is that he was a genuine (relatively) long-term believer in Gamestop and he steered clear of all conversations where nonsense was being spouted. I don't think he has any obligation to engage there and I suspect the courts will find the same.

You're saying that if you were an SEC prosecutor looking at these public facts, you wouldn't be interesting in investigating? Really?

Again: I admit that the innocent explanation is possible. I just don't think, given the circumstances, that it seems likely.

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#99

Post by sokoloff »

newacct583 wrote: post #98
sokoloff wrote: post #97

Earlier quoted context omitted.

An alternative point of view is that he was a genuine (relatively) long-term believer in Gamestop and he steered clear of all conversations where nonsense was being spouted. I don't think he has any obligation to engage there and I suspect the courts will find the same.

You're saying that if you were an SEC prosecutor looking at these public facts, you wouldn't be interesting in investigating? Really? Again: I admit that the innocent explanation is possible. I just don't think, given the circumstances, that it seems likely.

With an absence of evidence of wrongdoing, I assume innocence by default. Perhaps this is where we differ.

By all means, the SEC will look into this (as they should), but I’d wager that DFV is not going to be found guilty.

Re: ‘Roaring Kitty’ Sued for Securities Fraud over GameStop Rise

#100

Post by uniqueid »

ChicagoBoy11 wrote: post #95
uniqueid wrote: post #91

Earlier quoted context omitted.

The internet is full of vaguely conspiratorial takes involving 'elites' and I believe it has more to do with internet culture than the facts behind the 2008 financial crisis alone. A theory recently occurred to me that I think is part of the explanation: The rise of blogs and sites like Youtube gave independent journalists reach. Independents vastly outnumber people working in mainstream media. Yet mainstream media h…

Tyler Cowen has a book that addresses this, but I believe it is even less complicated than you make it sound: Ultimately, to justify the incredible production value, major outlets need to appeal to a wide audience to make the economics work, whereas random dude on YouTube needs to appeal to a LOYAL audience. In an age when switching costs to consumers is something trivial, big behemoths will only survive if they can…

I agree with all of that, but I think it augments my point. It's still the case that indies have more incentive to bash mainstream media than to praise it. An Alex Jones can't easily compete with a major news outlet to report, say, the Burmese coup, but he can shout 'The MSM is lying to you! Myanmar is a Globalist plot!' and amass a viewership of millions. Once you have enough indies riffing off one another, reinforcing the narrative, you wind up where we are today.
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