[caffeine]

I am not against charging certain actors in the 2008 crisis with fraud and manipulation either.

The 2008 recession is not really a comparable event to the current GME short squeeze. It was rather a broad series of events, most of which were unfortunately legal, some of which were probably not.

In that case I would be in favour of charging the ratings agencies with fraud, and possibly the financial regulators with gross incompetence.

Edit: I don't see it as "big guys vs small guys". I see it as "law abiding people vs not".

So my reaction is not "its unfair to prosecute the little guy," but rather "we didnt get those criminals but at least we can get these criminals."

[lazyasciiart]

Do you think that something like "Elon Musk tweets the word 'bitcoin'" can/should actually be charged as market manipulation? What about people selling their newsletter of stock tips? What about printing an article in Bloomberg suggesting that XYZ is undervalued/overvalued for $reasons? What about some nobody on reddit posting to wsb to say let's go to $321! What about being paid to tell clients what you think they should invest in? What about telling other users on reddit for free what you think they should invest in?

I'm not sure I see a clear line in there to call any of it illegal.

[nrmitchi]

I feel like this question is a trap, but I'm bored, so I'll give it a shot.

First off, not all "market manipulation" is illegal. If it was, a company announcing a new product would be "market manipulation", because it impacts the stock price. But I think you're right that the line is definitely grey in a lot of situations. And really, that's why we have courts.

> Do you think that something like "Elon Musk tweets the word 'bitcoin'" can/should actually be charged as market manipulation?

If Elon Musk had just bought a whole bunch of bitcoin, then tweeted it out, and then sold his newly acquired bitcoin, then yes. He 100% knows that what he tweets affects markets, and attempted to directly benefit from it. If you want to argue that he doesn't know that his tweets affect the market, the SEC has already determined that it does based on the "TSLA private at 420" situation.

> What about people selling their newsletter of stock tips?

Market manipulation requires actual market manipulation. I dno't believe that "attempted market manipulation" counts (but I may be wrong). All of these newsletter attempts fail, so there's nothing to really charge.

If any of these newsletters actually have a measurable effect, or if the person sending them is buying-sending-selling (at a profit), then yes, it is market manipulation.

> What about printing an article in Bloomberg suggesting that XYZ is undervalued/overvalued for $reasons

This is kind of what Bloomberg does, and they typically have arguments in both directions (which I think kind of evens it out). That being said, true information, with real evidence, is not illegal market manipulation. DFV's initial "due diligence" and legitimate bull case are not illegal market manipulation.

> What about some nobody on reddit posting to wsb to say let's go to $321!

Now you're getting grey. I'm not qualified to answer. This answer will likely be very similar to whether or not something is "inciting a riot", and will be super context-dependent.

But note that this is different than saying "GME is going to $1000 because of <totally false and made up reasons>" (especially if you already have a position, and if you make a profit as a result of the market that you influenced. Remember, if you don't actually influence the market, then it doesn't count.

But whether or not you succeeded in influencing the market can easily be determined after-the-fact. Just because you get away with it in the moment, doesn't mean no one will look back.

> What about being paid to tell clients what you think they should invest in?

If this is your job, you are likely licenced in some way, and the rules are likely different.

> What about telling other users on reddit for free what you think they should invest in?

I think the answer here is the same as the WSB-specific question

---

Feel free to disagree with me, these are just my opinions, and again, context matters.

[lazyasciiart]

Not a trap so much as a way to get your opinions clearly stated in a way that I could follow, instead of back and forthing to define the boundaries.

> If you want to argue that he doesn't know that his tweets affect the market, the SEC has already determined that it does

The SEC found that as CEO his public statements are considered official announcements, but that doesn’t really say anything about him “being able to affect the market” in general. I believe that would not actually be market manipulation because he was telling the truth - the regulations require fraud or misstatement (lies). They don’t technically require statements to have evidence or even be true, because people can be wrong.

> But note that this is different than saying "GME is going to $1000 because of <totally false and made up reasons>"

Exactly. Telling other people to invest in something because you believe they can make money at it is not market manipulation so long as you believe what you are telling them.

Where people think WSB could get into trouble is actually purchasing the shares - because what is perhaps illegal is the act of making a trade to drive up the price for short sellers and make them buy back stock - and some of them may have said things that show this intent.

However this version of manipulation is a very unclear concept - the plain reading of the law makes general trading to make money basically illegal, so it has been heavily interpreted by the courts and there is actually a circuit split on whether any otherwise valid trade can be illegal because of intent.

https://projects.iq.harvard.edu/files/financialregulation/fi...

[nrmitchi]

> is not market manipulation so long as you believe what you are telling them.

I believe there is also thought that this concept could get some people in trouble.

There are a fair number of "sounds right but actually aren't" accusations floating around about GME (along with complete garbage[0]); if you know that these are false statements when syaing them (which in some cases is definitely provable), then you could be in a bind.

[0] I think the most striking example of "complete garbage" that I've seen (but unfortunately can't find any more) is a set of claims that Microsoft is going to acquire GameStop to turn all GameStops into XBox E-Sports lounges. I mean, could it theoretically happen, yes, but I don't think that anyone believes that at all. That's the kind of boiler-room style shit that used to be considered clear-cut fraud.

[lazyasciiart]

Yea, there's definitely an area in the middle where people don't believe what they're saying so much as convince themselves that they don't know for sure it's not true. The idea of searching wsb for the ones you could prove in court were lying seems like more work than benefit, though.

[morlockabove]

What a very convenient point of view for the people above the law. I hope they're passing some of their gains on to you.

[caffeine]

I voted for Obama twice. But his failure to properly prosecute the bad actors in 2008 was one of the biggest failures of his presidency in my opinion.

However:

1) It's still not too late to go after those people. Some NY DA should make his career on this.

2) The biggest financial crime ever has been the years of unmitigated QE which has consistently taken money from the income-earning class and handed it to the wealthy asset holding class. This is a bigger travesty than all other financial crimes. Not clear what to do about it, there is nobody you can vote for who thinks it should end.

[niktwazny]

I believe you don't give enough credit to the scope of this pump and dump. 2008 was, more or less, a local US problem. Very few outsiders had their money in it. This one has the rest of the world's money involved as well. And that, in my opinion, moves the center of gravity of that issue into different territory. Resentment. Some involved in that raid are in it for the pain it causes those hedge funds, not for the money ( no matter how little true believers there are ). If US punishes those kids, that resentment will only grow, and it'll grow among those not in US. The growth of us vs them mentality is the last thing anyone needs

[throwaway2048]

its funny how its always a certain class of people "we didn't get", the answer isn't to shrug your shoulders and say oh well.

[caffeine]

It's not too late to get those people too.