you obviously haven't paid attention to SEC prosecution cases in the last 5 years, they regularly catch idiots giving advice through "newsletter", emails, "webminars", etc... and coming hard on them. I am trying to educate you here and you are throwing your pencils at me because you can't grasp what's going on and you prefer to look at the birds through the window LOL
if it's true, he is double fucked, because he should have known what he was doing was "illegal" or violating all kind of compliance principles. Same.
I like this part: FINRA has strict rules for licensed brokers regarding use of social media. For example, their rulebook states: “Investors and financial services professionals alike are increasingly using social media for a variety of business purposes. Social Media may be a new medium, but FINRA’s rules on communicating with the public are still applicable. The rules protect investors from false, misleading claims, exaggerated statements, and material omissions… “Firms and their registered representatives must retain records of communications related to their ‘business as such.’ The ‘business as such’ requirement is based on the content of the communication not the type of device or technology used to receive or send the communication. These records must be preserved for a period of not less than three years… “Firms must have the ability to supervise the business-related content associated persons are communicating on these sites, including possible suitability determinations if recommendations are made. A registered principal must review prior to use any social media site that an associated person intends to use for business. The principal may only approve a social media site if the principal has determined the associated person can and will comply with applicable rules…” We find it highly unlikely that MassMutual would have approved Gill to post on Reddit’s WallStreetBets, whose users appeared to pride themselves on how frequently they could pack the words f*** and b***s into a sentence, frequently with representative artwork.
Ok maybe I'm missing something here, but see that screenshot below of his account? It says he has 500 of the April $12's. It says he paid $0.20 That green line I drew on the chart is the $0.20 level. All those volume bars corresponding to anything at or below $0.20... are like onsie/twosie transactions. I mean I might be missing something here (always a possibility), but how does he owns 500 contracts? I call bs.
I don't think he will be prosecuted at all just because of the bad optics the SEC will get for doing that.
Ok to settle the question, here is a definition of "front-running" according to Wikipedia: Front running, also known as tailgating, is the prohibited practice of entering into an equity (stock) trade, option, futures contract, derivative, or security-based swap to capitalize on advance, nonpublic knowledge of a large ("block") pending transaction that will influence the price of the underlying security. So let's break it down, in order to be found guilty of front running, WSB's action would have to satisfy two criterias: 1) He has to have advanced nonpublic knowledge and 2) There has to be a large (block) pending transaction that will influence the price of the underlying security. So let's examine the 1st criteria. Does WSB have any advanced knowledge of any transactions let alone large block pending transactions? In order to know in advance, he would have to prophetize with certainty that there would be any transactions, large transactions that would follow after he bought the stock. Would this be possible at the time when he's buying his own stocks of all those shorted stocks? Did he have the crystal ball that after he bought the stocks, there would be large block of pending transactions that will make the price of the stock go up? The answer is obviously no. Second, not only he has to have advance knowledge but the knowledge also has to be nonpublic, i.e. insider information. Did WSB have the insider information when he was buying the shares of Gamestock? And as a result that there would be large transactions that will push the stock up? The answer again is no. With "no" to both answers, WSB's action would not satisfy the first criteria. Let's look at the 2nd criteria. Assuming that WSB somehow "knew" in advance in secret that there would be transactions happening, buying transactions that is to the same stock that he just bought. But would it be large (block) pending transactions that will influence the price of the underlying security? I mean for all we know, those transactions were from little nobody, mom and pop investors, people buying 100 or two hundred shares either through possible option exercising or outright buying the shares. Besides a few 10K block transactions, were there really "large (block) pending transactions that will influence the price of the underlying security"? Hardly any. So with "no" to this answer, WSB's action would fail to satisfy this criteria as well. With failure to satisfy both criteria, WSB' action would not constitute "front running". And as a matter fact, WSB action is exactly the same as a professional short-seller who may accumulate a short position and then publicize the reasons for shorting the stock. And according to Investopedia: "This seems perilously close to a short-seller's version of a pump-and-dump scheme, in which a speculator hypes (or bashes) an investment for personal gain. There is a distinction, however. The short-seller in this example reveals the personal financial stake at the time of the recommendation." Which is exactly what WSB did except in the other direction. Instead of dissing the company, he was promoting the company and the stock. When he was presenting the stock on Reddit, he clearly revealed his own ownership of the stock. He never had any attempts at hiding the fact that he had a personal stake in the stock ownership and would benefit greatly, just like everyone else from the appreciation of the stock. So if the shorts never gotten into trouble for shorting the stock and then dissing the company to make everybody short the stock as well (like what Melvin Capital did to Gamestop in the first place) with disclosure of the financial stake in the stock, then WSB would also be fine doing the opposite, buying the stock and then showing genuine interest in the company and the stock to make everybody to buy the stock while disclosing the financial stake in the stock at the same time. What's good for the goose is good for the gander. Plus WSB is not even dumping the stock. He's unloaded some positions but he's keeping the majority of the positions there. I hate to say this to our beloved ET founder but I disagree in this case. I think WSB will be fine although SEC will try their hardest to make his life a living hell of course in prosecuting him just to show taxpayers that they are working. They are very good at that but at the end, it will be much ado about nothing.
Oh no SEC will prosecute him. They will have to at least make a show of it just to appease the ones that's paying the bill. But the charges won't stick.
First of all, he is no longer working at MassMutual and second he's not promoting stocks in a professional investment advisor capacity or as a professional investment advisor on behalf of MassMutual and instead he is trading stocks and promoting stocks on his own. There are no rules against somebody who happens to have worked for the financial industry and trade stocks on his own and tells everybody how he likes those stocks for himself especially that he's no longer working for an investment firm and is doing the bulk of the "promoting" as an individual. The most he will get is "failure to document and disclose" and MassMutual will get "failure to supervise" for not disclosing the fact that he opened an account with ETrade and started trading GME. That's it. There are no rules against brokerage or investment industry professionals from opening personal trading accounts while working for an investment firm. He just didn't disclose. These are usually small charges that all financial companies get all the time. If you actually open up any disciplinary databases of any regulatory bodies like SEC, CFTC, you will see every single financial company's got them on their record. Of course SEC might make a big deal out of them just to show that they got something on him just for showing.