SEC is the personal henchmen of the rich and the established. It took them 8 years to investigate Bernie Madoff with all the evidence and information they needed and they still couldn't find out until Madoff's own sons went to FBI and literally told them about Madoff. All those fake Chinese companies that defrauded hundreds of millions of dollars of American investing public's money, did SEC do anything, let alone say a peep?? Not a word. If not for this documentary on NetFlix , I didn't even know about it. One tiny little person yapped about a stock on Reddit, OMG!! it's market manipulation!!
the SEC is a different organization now, they go after everyone, and you get a fine if you misplaced a comma or a period in your "disclosure". They are not fucking around. Very professional, and very competent. FINRA is far worse and more aggressive IMO. This is why the $GME is a fucking dream job for the SEC, they are salivating and masturbating as we speak about the whole case. This is going to make some careers internally
Yeah but I cannot just force people not to exercise just because I have to put up cash on my side!! This is what RH is essentially doing. And RH is not even doing it right. If putting up cash is the problem, why don't they just let people trade on cash which is what a lot of brokerages including IB are allowing. Why restrict the buying of shares??!! This is illegal and is against free market principles. A brokerage shouldn't be allowed to do that. If I have shorted a stock that its price is going up, I cannot force other people not to buy it so the price won't go up and I won't lose any more money. So if I cannot do that, then why liquidity providers like Citadel can do this through RH? I cannot believe SEC, the "police" of the market is allowing this. RH is only restricting the buying of shares so his related companies won't have to short and thus won't have to lose money. That's the only reason why. And meanwhile Republicans are in the WH to propose cutting down stimulus packages so "little guys" won't have money to trade.
yeah going after the little guys. If they want to go after somebody in this case, they should be going after Citadel Securities and Robinhood for undue market influence, market manipulation, conflict of interest, breach of fiduciary duties, negligence, just some of the charges that I am thinking on top of my head.
This is what I think will happen, but I will probably be proved wrong 1. They are going to charge roaring kitty with some violations, probably take all his profits away, in exchange of no criminal charges etc... 2. They are going to shutdown Reddit threads about stocks, or force Reddit to put in place some heavy compliance thing with disclosure, like they are doing with SA, every time you "promote" a security. Maybe Reddit will say "fuck it" and shutdown every discussions about "investing" 3. To protect "retail" against themselves, they are going after all those investing apps with heavy fines and shit if they don't restrict access to MicroCaps and "penny" stocks, and above all, restrict options if you don't have at least 2 or 3 years experience in trading. RH marketing is going to be seriously impacted by this. They already paid a nice fine of 48M USD for not disclosing their relationship for "Paid Trading Flow" that was paying for the "free" commissions.
because nothing is in real time, there is a T+2 settlement, which means that your "cash" is not actually debited right away, but 2 days to settle the trade. So basically, it's temporary "credit", but in that 2 days windows, a lot of shit can happen, and when volatility is high for some of those securities, there is a risk that some "Default" in settlement happens. To prevent this, and to "safeguard" your account against a total collapse of the broker, they ask your broker to come up with "cash" to pay for all the retail trades that you guys are putting up. Got it?
Actually Vlad explained it right to Elton on that YT videos. They have no choice. They have to "betray" their customers because they simply do not have the "cash" for regulatory purposes. Finance is really a compliance industry these days, if they hadn't take those measure, they would have been under fire by the regulators for not taking actions, and worse, their "clearing" counter parties could have shutdown all their "trades" as a protection measure. Actually, RH did play it smart. They were asked to come up with $3b overnight to cover the risk, which obviously didn't have. Instead they came back negotiating and explaining they would take measure to "stop" the fools from trading. That put the risk bill down to $1b, and eventually they only had to $700m, which they did, immediately overnight, in one transfer. Imagine that, doing an overnight ACH with $700m
If I was a SEC enforcement lawyer, and thank god I am not I would have been wanking 24/7 on YT watching Roaring Kitty and re-reading every posts on those Reddit threads since last Wednesday and over all this week-end it's fucking hot lesbians porn having jail sex in their cell !!!
%% Good points. And looks like polar bears + bull elephants are still selling GME on weekly chart/LOL. Since any broker tends to make money on comissions, margin loans,order flow...... they have a good reason to raise margins or restrict trading..........................................................................................................