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SEC suspends trading in 15 securities due to questionable social media activity
- blobbers 6y agohttps://images.app.goo.gl/wM933WsugP9HXLH8A https://images.app.goo.gl/wM933WsugP9HXLH8A says everything you need to know about Thomson Reuters
- somerandomboi 6y agoInteresting article.
- mike503 6y agoI’m confused at the end goal here. Is this for “protection” or for “fraud” concerns? Stock manipulation isn’t legal, but banding together to pump and dump and things like that... if they’re not part of the company where insider trading or anything could be a reason, how is that really anything that should be regulated? Sounds like free market to me. This just seems like worries that the villagers are figuring out ways to band together and the rulers are scared.
- nerdponx 6y agoThe end goal here is to stop suspected illegal pump & dump activity. The definition of "pump & dump" is to make false or misleading statements in order to get the price to go up, so that you can sell. It is not free market activity; it is fraud.
- rufus_foreman 6y agoHere's Wikipedia's definition of "free market": "In economics, a free market is a system in which the prices for goods and services are self-regulated by the open market and by consumers. In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority" If you outlaw pump and dump scams, it's not a free market. I tend towards favoring less government rather than more, but I wouldn't invest in stocks in any sort of free market environment.
- nojokes 6y agoSo imagine, you hold a large amount of stock of one particular company. If I put a gun on your head and tell you to sell your stock, it is a free market?
- rufus_foreman 6y agoI don't know, according to the Wikipedia definition is it? I'm not going to be around forever, you need to start figuring these things out for yourself.
- systemvoltage 6y agoI disagree with classism take on GME and other meme stocks. If anything else, it’s the opposite. The common person is being manipulated and the hedge funds and major personalities on these social media are raking in. It’s the biggest misconception of this entire meme stock phenomenon.
- fendy3002 6y agoThe original question still stands. If the issue of hedge funds shorting GME above 100% is true and (theoretically) hedge funds can pump as they like because they have the capital capacity and act as one entity, how can you regulate it? It's not so much different that people banding together to pump a stock. EDIT: I don't defend GME, imo it is a pump and dump. But how can SEC can regulate equally for this specific issue?
- snowwrestler 6y ago“Pumping” in the context of pump and dump is not buying, it is exhorting other people to buy. It is a form of fraud where person A lies to person B in order to extract money from them.
- totalZero 6y agoI totally disagree. The whole market sold off both times GME squeezed, then popped back as GME receded. Bonds did the same this week. I could be wrong, but this tells me that people on the short side had to liquidate positions in order to maintain margin. I don't know any retail investors who can move the ten year. The fact that PFOF brokerages are the ones that halted buying tells you something about the nature of the buyers.
- systemvoltage 6y agoSee: https://www.wsj.com/articles/this-hedge-fund-made-700-million-on-gamestop-11612390687 https://www.wsj.com/articles/this-hedge-fund-made-700-millio...
- 6y ago
- HNfriend234 6y agoIf you look at the list of stocks you can all see they are super super tiny companies so likely it is fraud schemes aka pump and dump. That's when a small group of people (typically) organize an effort to pump a stock using false information. Since these stocks are so small, even getting a few amount of small investors to buy in could result in significant profits for the fraudsters. Doing a pump and dump on a stock like GME would be extremely difficult to pull off.
- elliekelly 6y ago> if they’re not part of the company where insider trading or anything could be a reason, how is that really anything that should be regulated? Sounds like free market to me. The “pump” is the action of fraudulently inducing someone to buy the security which is against the law.
- morelisp 6y agoIn these situations it's other villagers, not the rulers, who are the ones left holding the bag.
- kristopolous 6y agoThe list is two clicks away, buried a couple paragraphs deep, here's the copy paste of what everyone is looking for Bebida Beverage Co. (BBDA); Blue Sphere Corporation (BLSP); Ehouse Global Inc. (EHOS); Eventure Interactive Inc. (EVTI); Eyes on the Go Inc. (AXCG); Green Energy Enterprises Inc. (GYOG); Helix Wind Corp. (HLXW); International Power Group Ltd. (IPWG); Marani Brands Inc. (MRIB); MediaTechnics Corp. (MEDT); Net Talk.com Inc. (NTLK); Patten Energy Solutions Group Inc. (PTTN); PTA Holdings Inc. (PTAH); Universal Apparel & Textile Company (DKGR); Wisdom Homes of America Inc. (WOFA). The SEC also recently issued orders temporarily suspending trading in: Bangi Inc. (BNGI); Sylios Corp. (UNGS); Marathon Group Corp. (PDPR); Affinity Beverage Group Inc. (ABVG); All Grade Mining Inc. (HYII); SpectraScience Inc. (SCIE).
- dj_mc_merlin 6y agoDoes not include GME. Obviously they didn't want to let that make the headline go to waste..
- itsoktocry 6y ago>Does not include GME. Obviously they didn't want to let that make the headline go to waste.. What in that headline implies anything about Gamestop?
- dj_mc_merlin 6y ago"social media" obviously. With the heavy news coverage on WSB and GME the mind goes to that when reading the headline.
- nerbert 6y agoNothing but the "suspicious social media activity" not being clearly defined would lead one to think that GME would be included in the list, GME being the focus of wsb for some time now.
- xiphias2 6y agoThe article had GameStop in it, although SEC was doing the good thing, and stopping trades where the companies were violating securities rules.
- edoceo 6y agoList on SEC site https://www.sec.gov/news/press-release/2021-35 https://www.sec.gov/news/press-release/2021-35
- joshstrange 6y agoHonest question: How often does the SEC do something like this? More specifically: How often does volatility caused by hedge funds result in suspended trading of certain stocks?
- kristopolous 6y agoFrequent enough that they provide an RSS feed. List is here: https://www.sec.gov/litigation/suspensions.htm https://www.sec.gov/litigation/suspensions.htm Also check the previous years, they appear to be archived static pages as opposed to say a database query populating a template - really makes me wonder how this site is built.
- SpicyLemonZest 6y agoTo clarify, the issue here isn't just volatility. The companies in question haven't made any SEC filings in over a year, which generally means they're not really doing business anymore and certainly means it's hard to imagine a value-based case for trading them. The SEC often suspends trading after a few years of no filings (random example from 2020: https://www.sec.gov/litigation/suspensions/2020/34-89717-o.pdf https://www.sec.gov/litigation/suspensions/2020/34-89717-o.p...), and it's reasonable that a pumping scheme might push them to act faster.
- tomlagier 6y agoHonest question - does there need to be a value-based case for trading something? Does the SEC have a mandate for stopping purely speculative trades?
- katmannthree 6y agoMaybe something along the lines of it being better for society for capital to flow towards productive companies rather than gambling on zombies? I agree that it's an odd call.
- nabla9 6y ago>The mission of the SEC is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. The SEC strives to promote a market environment that is worthy of the public's trust.
- Simulacra 6y agoWill they do this every time, and what's the breaking point before reform?
- phone8675309 6y agoThey will do this every time that a business criminal friend of a high government official stands to lose a ton of money.
- grafporno 6y agoJust google the tickers. These are penny stocks (or rather _way below a penny_) pump and dump scams.
- Supermancho 6y agoYou are correct. Most of the time the SEC seems unconcerned with aggregate public trades that manipulate stock prices.
- modeless 6y agoNot Gamestop or AMC, which is what I thought at first.
- runawaybottle 6y agoAMC is trading at like a reasonable price, why does that one keep getting lumped in? I’m long AMC sub $10 :p
- tyingq 6y agoIt looks like it jumped from ~$2 to $20 at the end of January. I do think the coronavirus lockdown might have created more people that found they didn't miss the theater than those that did. And it also opened up faster to video channels that might be difficult to take back.
- caymanjim 6y agoThe $2->$20 bump was entirely the result of WallStreetBets pumping and others bandwagoning, but it's not an unrealistic valuation. It wasn't completely insane like GME. AMC only went up to $20 for one day (near its Oct 2018 price) and is now at $8.28 (roughly where it was at pre-pandemic). Sadly for me I had it on deck as my next pandemic-recovery bet in January, waffled for a few days, and then those nutjobs at WSB ruined my plans.
- fairity 6y ago> It's not an unrealistic valuation. It wasn't completely insane like GME. AMC only went up to $20 for one day (near its Oct 2018 price) and is now at $8.28 (roughly where it was at pre-pandemic). I beg to differ. AMC has nearly tripled their share count during the pandemic via ATM offerings. So, an $8 share price now is not the same as it was pre-pandemic. AMC's valuation now is 3x higher than pre-pandemic, which is indeed, insane, considering the state of their business. Source: https://ycharts.com/companies/AMC/shares_outstanding https://ycharts.com/companies/AMC/shares_outstanding
- jrockway 6y agoWhat is the next step in cases like these? Let's say social media activity led someone to making an unwise trade. Suspending trading doesn't fix the problem for that person, now they're just stuck in a bad position. Does the SEC ever "fix it" for that person, or is it all damage control now to reduce the extent of the problem, and those that are already in are kind of screwed?
- vorpalhex 6y agoIf it's an unwise but innocent lead - like your friend who is dumb telling you what stocks to buy - then nothing because nothing criminal has happened. If it's illegal, say a company or investor in that company created a bunch of social media bots to convince others to buy into the companies stock - then they'll get to hire a lawyer and go to court, get fined, etc.
- thrill 6y agoThe SEC can order trades to be reversed but the broker is then on the hook to make good on any shortfalls. Long ago I had a federal judge appoint me as the CEO of a small-cap company whose prior CEO (who I then gathered evidence on to send him to federal prison) had improperly created and sold significantly more shares than they were reporting. I asked for all shares sold and not reported to be reversed. The SEC declined. The system as we have (well, had, as I hope it's changed some) makes this not very hard to do. In fact, I found out some years later that one of the SEC attorneys I'd worked with went private and then aided a different small cap to pull the same scam. He got some quality Club Fed time out of the deal.
- nojito 6y agoMany of these OTC stocks were spammed on r/wsb and others during the GME surge.
- emteycz 6y agoYou must've confused the sub. Wallstreetbets utilizes automod which will delete any mention of these tickers.
- deleted 6y ago[deleted]
- nojito 6y agoNope. There’s a reason they put the sub on private to purge it when things got out of control. A simple search on pushshift is enough to show that their auto mod wasn’t quick enough at all.
- computronus 6y agoThe suspensions are due to "questionable trading and social media activity", so they are apparently looking at more than social media. Still, the consequence may be that the social media activity moves to venues that the SEC can't observe as easily.
- nerdponx 6y agoStill, the consequence may be that the social media activity moves to venues that the SEC can't observe as easily. In that case... good! The whole point of a pump & dump is that you get other people to bump the price for you, then you sell, and leave everyone else holding the bag. If they can't do it on social media, then they can't do it at all. It's not like selling drugs where people are going to move to some kind of black market for stock tips. It's just not going to be out there, so people won't fall for it because it won't exist anymore. Mission accomplished in my opinion. Unless you plan to run a pump & dump scheme through Twitter/Facebook DMs?
- paulie_a 6y agoThe SEC has caught up to 2001, yay
- abarrak 6y agoThere's also that rubbish app (forgot its name) for parent control in phones is not in the list. Only 1 employee (founder) and in daylight using twitter to cash out, manipulate the price, issue more shares, etc..
- abarrak 6y ago$RDAR
- ffhhj 6y ago> questionable social media activity Wait, where is the Be-Less-White (KO), formerly "White-Customers-Only!" company?
- oip 6y agoHi all, I am a mod on r/WallStreetBets and wanted to share with you that our bots haven't seen any of the tickers mentioned in the SEC press release. We filter tickers based on a number of factors, but low market cap (below $1B), is the most common reason for content being removed. One of our biggest issues is data reliability. If you know of an API that can provide accurate data and an exhaustive list of tickers (especially on non-US exchanges), please reach out to our modmail. [0] Best, OIP [0] https://www.reddit.com/message/compose?to=%2Fr%2Fwallstreetbets https://www.reddit.com/message/compose?to=%2Fr%2Fwallstreetb...
- gerdesj 6y agoHiya mate, nice of you to pop on by here. I'm a passable Redditor but I only sport concrete hands (ex Civ Eng nerd), certainly not diamond, but I will never despoil myself with paper hands!
- TameAntelope 6y agoCan someone explain to me why this dedicated but unpaid volunteer is trying to keep Reddit compliant with SEC regulations? What other company on the planet would shift that burden to its own users??? Happy to discover I’m not understanding the situation, but that seems absolutely bonkers to me. Does Reddit not have any lawyers?
- pc86 6y agoBecause Reddit's answer would be to simply ban the entire community. There's not much choice on the mods' side. Yes, Reddit would have other options of course. But they all cost money, so they wouldn't do it. Spez would just nuke WSB and move on with his day, secure in the belief that he saved Reddit from an SEC fine or whatever.
- im3w1l 6y agoReddit has two approaches they use. One is to target the sub itself with bans or quarantines as you say. The other is promote / demote mods.
- liquidify 6y agoI bet it really pisses them off that they can't stop trading in Dogecoin.
- ketanmaheshwari 6y agoThe title should be edited to say (not GME/AMC/BB/NOK).
- hikerclimber 6y agoHopefully hedge fund billionaires lose their money.
- deleted 6y ago[deleted]
- techbio 6y agoCan't resist, forgive me: "FEC suspends [nothing] due to questionable social media activity"
- techbio 6y agoYes, ok, different agencies, different laws, different domains, different impact, but same brave new world and the divergent responses seemed moderately interesting.
- mtnGoat 6y agoWhatever happened to a free market in the land of the free? Every investor Should be aware of the risk that they could lose everything and that markets, whether we like it or not, are manipulateable. Let them run wild.
- dang 6y agoUrl changed from https://www.reuters.com/article/us-retail-trading-sec/u-s-sec-suspends-trading-in-15-securities-due-to-questionable-social-media-activity-idUSKBN2AQ2VZ https://www.reuters.com/article/us-retail-trading-sec/u-s-se..., which points to this.
- airhead969 6y agoSo does this mean anyone can selectively game the freezing (DoS) of any stock by throwing spurious social media activity?
- tclancy 6y agoSure. Try it with something worth more than zero and see if you can grab a significant position in order to make the scam worthwhile. Consider what the margins to make a killing on a pump and dump look like on a stock that sells for $100/ share. Every generation thinks they invented scams.
- ldbooth 6y agoMeanwhile most major banks are convicted felons in the US. JPMorgan, Citibank, Wells Fargo...
- pylua 6y agoI think you are onto something. The most privileged class of "person" in the united states is corporations that get slaps on the wrist for breaking laws. Now I understand why Dr evil from Austin powers ran a corporation.
- ldbooth 6y agoThere are a few books on this I haven't read about Corporations over the past 30 years using the court system to gain as much/more rights than citizens. There are countless examples. I have an LLC. Self employed. People making minimum wage are getting $1.4k checks. The single owner LLC's (with max'ed out payroll capped at $100k), through PPP single owner LLCs get maxiumum $20.83k. It's never been more clear to me the slant to trusting corps over people. Also my business allows me to write off way more than a typical American Citizen. My recommendation: equality with corps will be a near-impossible fight for someone like me, so all US citizens should have a personal business even if it is only making paper losses.
- chovybizzass 6y agothis is how they stop us. move to crypto.
- Ecstatify 6y agoIronic that you say move to crypto when ICOs have been the biggest pump & dump schemes of the last few years.
- williesleg 6y agoI'm from the government and I'm here to help.
- gorgoiler 6y agoIf you post on Reddit to promote a stock and also buy some of that stock, you’re fine. If you denounce the stock at the same time as you sell it, you are also fine. If you promote-and-sell* or denounce-and-buy, the SEC will be contacting you for assistance in their ongoing investigation. *pump-and-dump
- Proven 6y agoHow come US Treasury Bonds never get halted? For 10 years now we've been seeing fake news - usually spread by the Fed and politicians - that T-Bonds will drop in value.
- jl2718 6y agoUnfortunately they’ll never keep up with the ‘demand’ for market manipulation unless they fix the ‘supply’ of scared people that have no stable store of value. What you’re witnessing, is a vote of no confidence in monetary policy, and a scared populace, unfortunate breeding grounds for small time scammers as in these stonks. I’m sure there’s more; people don’t know anything about what they’re investing in. That includes top investors and analysts. It’s all pump and dump, just more elaborate as it gets bigger. I don’t know what the fed’s objective is anymore (actually ever), but a successful nation is one in which people are not concerned with finances at all, except that they put their minds and hands to socially-positive activity. Now our savings account is an endless gamble on stocks. Might as well be sports betting; that’s at least a lot more transparent. I don’t want to put 10 seconds a year into thoughts about finances, taxes, housing costs, inflation, deflation, interest rates, stocks, bonds, Bitcoin, or whatever. But their policies are forcing me and so many other people to put our whole lives into it. It’s probably 80% of the economy right now, totally wasted on a few people’s failed theories about macroeconomics, the same people over and over again, covering for their mistakes with new failing theories and policies. Unfortunately we can’t just write it down mathematically, program it into a computer, release source, and be done with it. No; it’s based on their personal feelings at any given moment. Oh and by the way, it all just so happens to make them and their families and friends and business and religious associates impossibly wealthy. Must be because they “understand” more than we do. Sure. I wonder if they ever think, “hey, maybe if we want less financial manipulation, we should stop doing it ourselves.” (Not the SEC; they just react.) You should not be an investor. You should save until you have everything you’ll ever need, and then invest in things you know about, and only because the money is going toward something productive and socially-valuable, as in the society that you, individually, want to live in. This is the most powerful form of voting. Index funds don’t solve the problem. That’s just paying someone else to steal your vote.
- intricatedetail 6y agoWhat's next? Allowing only profitable trades? This is a worrying trend when SEC thinks they know better and usurp the right to tell people what to do with their own money. They should look at banning sales of borrowed shares, but that would upset their rich mates?