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Short squeezes are illegal according to the SEC. WSB shows many people clearly collaborating to create a short squeeze, example - https://www.reddit.com/r/walls

Short squeezes are illegal according to the SEC. WSB shows many people clearly collaborating to create a short squeeze, example - https://www.reddit.com/r/wallstreetbets/comments/l594yg/gme_short_interest_remains_at_139_bloomberg_the/ https://www.reddit.com/r/wallstreetbets/comments/l594yg/gme_.... Robinhood would have legal liability for aiding and abetting an illegal short squeeze had they continued.

horsawlarway 6y ago
Short squeezes are absolutely not illegal - They're a natural property of how the investment vehicle operates when the price of shares spikes. The illegal part is a scheme to collude and manipulate the availability or price of the stock to intentionally cause a short squeeze. I'm not entirely sure I agree with you that posts like that are "collusion" (Cornell def here is interesting as a refresher - https://www.law.cornell.edu/wex/collusion https://www.law.cornell.edu/wex/collusion), but I can certainly concede there's plenty of shades of gray here.