[mike503]

I’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.

[systemvoltage]

I 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.

[totalZero]

I 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]

See: https://www.wsj.com/articles/this-hedge-fund-made-700-millio...

[totalZero]

Of the retail participants with a position in the shares, what percent of the total positioning do you think is on the long side versus the short side?

Of the short positions, what percent do you believe are from retail traders?

That's the line of questioning that you have to answer for yourself. Might help if you stopped using hyperlinks as a surrogate for reasoning.

[fendy3002]

The 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]

“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.

[HNfriend234]

If 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.

[nerdponx]

The 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]

Here'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]

So 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]

I 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.

[elliekelly]

> 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]

In these situations it's other villagers, not the rulers, who are the ones left holding the bag.