> I see no reason why "retail" traders can't fuck around on Robinhood and cause some meme stocks to explode.
It's called 15USC78i "Manipulation of security prices" [1]. It is unlawful to transact just for the purpose of forcing others to transact. Going through a fund's 13F filings, and deliberately driving up the prices of put options they sold should fall squarely into that area. And there are more than enough posts on reddit of people stating that this is exactly what they are doing. At the scale this is happening now, there is no doubt that there are going to be legal repercussions.
Steve Cohen and Gabe Plotkin both traded on inside information at SAC (Gabe was cc'ed on several of the communications). Why are they not in jail? Ohhhh because the justice system only impacts the 99%.
That's some nice whataboutism, but that doesn't mean this isn't exactly the kind of market manipulation for which the Securities Act of 1933 was written.
I think that only works on co-ordinated activity. Everyone on their is so small and not working in co-ordinated way. There is considerable discussion in the thread about the legality of it.
Also - what do you think short sellers like Citron do all the time. Put out fake reports about companies to make money off their short positions.
The sentiment on the trade is eff those short sellers and their sketchy tactics.
> I think that only works on co-ordinated activity. Everyone on their is so small and not working in co-ordinated way. There is considerable discussion in the thread about the legality of it.
There are entire threads and Discord channels dedicated to coordinating this. It will be extremely difficult to convince a court that there is no coordination or market manipulation, especially when there are people who are spelling that fact out. And reddit have all of their IP addresses.
> Also - what do you think short sellers like Citron do all the time. Put out fake reports about companies to make money off their short positions.
If you can prove that those allegations are indeed fake, then they can be held liable for that. But Citron's influence stems from the fact that they have published a large number of reports that were indeed correct, e.g. Valiant.
> The sentiment on the trade is eff those short sellers and their sketchy tactics.
What sketchy tactics? Expressing their view that a company like Gamestop is not worth very much on account of their outdated business model that relies on physical retail in a sector that has been going fully digital for the last 15 years?
In Citron's case they cast super sketchy dispersions about companies and hope that they influence investors who don't understand how the companies operate. It's right at the line and the cost of proving them wrong is not worth the effort... plus the SEC has bigger fish to fry when they have a mandate to enforce.
There's a pretty simple defense here. "I saw the posts on reddit and wanted to get in on the upward swing". Efficient markets at work. Unless you can tie real identities to the reddit posts there's not much to be done.
I don't think what they're doing violates the law[0], but they could easily subpoena Reddit and find out who the users are if they wanted to.
[0]: too complicated to get into here, but basically my interpretation of the law is that you need to be making trades that you intend to cancel or revert immediately in order for it to apply to you, and what these traders are doing is instead speculating on the price going up and hoping to cause the shorts to liquidate their positions, thus further driving the price up. Not spoofing to create fake demand.
In theory. I'm not sure if Protonmail or the VPN provider would respond to a subpoena, but I wouldn't rule it out. But realistically most of these people are using their home IP address and their gmail account.
Yes, but it can't be more than a few percent of people who go through the effort to set that up right? I know it's not hard to do (I've done it), but I think most people on reddit are using either their personal email or a throwaway gmail account they use from their home IP.
You actually still don't need an email address to create a Reddit account.
Reddit has stayed true to their word of maintaining the old design, and it's free of the dark patterns in the redesign. Go to https://old.reddit.com/register and just leave the email field blank or if you use the pop-up menu (the thing you get when you click login/register in the top right of the old design), you can click skip on the first screen where it just asks you for your email.
Indeed. In many cases, you can get far just by looking at post and comment history. You can tell what town they live in and see screenshots of their texts and FB posts (albeit with names and faces blurred).
There are some base requirements for market manipulation that are not met here. Namely, lying. You're allowed to tell your "friends" they should buy a stock.
It's called 15USC78i "Manipulation of security prices" [1]. It is unlawful to transact just for the purpose of forcing others to transact. Going through a fund's 13F filings, and deliberately driving up the prices of put options they sold should fall squarely into that area. And there are more than enough posts on reddit of people stating that this is exactly what they are doing. At the scale this is happening now, there is no doubt that there are going to be legal repercussions.
[1] https://www.law.cornell.edu/uscode/text/15/78i