Tag Archives: SEC

SEC Refuses to Address Massive Fraud in Markets

The Securities and Exchange Commission (SEC) just released its top enforcement priorities for the year. Rather than dig into systemic fraud in our markets, they’ll be regulating….confetti?


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According to a report out this morning on Reuters, the SEC will be focusing on:

”…behavioral prompts, differential marketing, game-like features…and other design elements or features designed to engage with retail investors on digital platforms.”

In plain English, they’re talking about the confetti some stock trading apps display when you make a trade. But that’s not all.

The SEC will also be regulating how funds can use certain words:

…funds with keywords such as “green,” “sustainable,” “ethical,” or “socially responsible” in their names will have to reflect an emphasis on these areas through their investing choices.

As if investors couldn’t simply look at the holdings and see if Exxon Mobil is there or not!

Combatting widespread financial fraud is nowhere in the SEC’s agenda.

Illegal naked short selling pervades our markets. Millions upon millions of trades fail to clear each day, especially in heavily shorted stocks like AMC Entertainment Holdings and GameStop.

But the SEC won’t be looking into that.

Despite $8 billion in losses on FTX, cryptocurrency regulation won’t be a focus for the SEC this year either. Why bother with that when the SEC could be requiring “a summary of registrants’ human capital resources,” whatever that is?

It’s no wonder author Jesse Eisinger called the feds “the chickensh*t club.”

The SEC is a toothless regulator. It busies itself with make-work, avoiding the real issues plaguing our markets.

Gary Gensler and the SEC need to start going after the real criminals.

What do you think of SEC enforcement? Leave a comment at the bottom and let me know!

More on markets:

Major Hedge Fund Down 54% — Survival in Doubt

Short Sellers Down $81 Billion in 2023

Citadel’s Illegal Trades — The Tip of the Iceberg?

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Over 57,000 Sign Petition to Ban Payment for Order Flow

At last count, 57,610 people have signed a petition at Change.org to ban payment for order flow. This practice involves market makers paying brokers for the chance to complete trades.

The market makers claim they complete the trade at slightly better than public market prices while still making a small profit.

At least one study indicates that payment for order flow actually does save customers money, especially considering that it removes the need for commissions. However, both Citadel Securities LLC and Robinhood Markets, Inc. have been fined for providing worse prices than public exchanges.

I favor not a ban, but more careful regulation of payment for order flow. I think the SEC should require brokers like Robinhood and market makers like Citadel to release data on a regular basis proving that they’re getting customers better prices than public exchanges.

Both companies are world class experts in data aggregation and analysis. They’re more than up to the task.

This type of regulation would allow retail traders to continue to trade commission free while also making sure they’re protected.

Meanwhile, if an investor doesn’t want their order sold to a market maker, Interactive Brokers offers such an account. But sure enough, it’s not free.

Many companies also sell investors their stock directly, no broker needed. Such a plan could be a great service for companies like AMC Entertainment Holdings, Inc. and GameStop Corp. to pursue.

So, will you be the signing petition? Let me know in the comments at the very bottom of the page.

More on markets:

Citadel Builds Huge Position in AMC Call Options

How Elrond Could Take Over Payments Worldwide

AMC May Issue Its Own Cryptocurrency, Per CEO

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AMC’s S-3 Withdrawal: What Does It Mean?

There is a lot of talk lately on Twitter and Reddit about AMC’s withdrawal Tuesday of an obscure SEC form called an S-3. Form S-3 is a filing that registers securities. In this case, the securities were convertible bonds, or bonds that can convert into stock when the holder chooses.

Many on social media conclude that this withdrawal is somehow part of a plan by AMC to kneecap short sellers. I’m not quite clear on how that would work, but removing the possibility of a lot of new share issuance does keep a tighter market in the shares, making a short squeeze somewhat more likely.

But I think the key part of the S-3 withdrawal is this:

The Registrant confirms that no securities have been issued or sold under the Registration Statement.

It appears to me that AMC is simply withdrawing an SEC filing that no longer reflected reality, thus keeping their regulatory filings current. They didn’t issue shares under the agreement, so
the shares couldn’t have been sold short. In all, there doesn’t seem to be a clear connection between the withdrawal of the S-3 and short selling in AMC.

This excellent video explains the situation well:

I won’t pretend to be an expert on S-3’s. Is it possible I’m missing something? Absolutely, and I’m curious to hear your perspective in the comments at the bottom of the page.

That said, we don’t need to draw any conclusion from the S-3 withdrawal to have strong evidence of illegal activity by short sellers in AMC. As I covered yesterday, repeated fail-to-delivers in a heavily traded stock like this, along with serious short interest, powerfully suggest illegal naked short selling.

Whatever the S-3 means, there’s more than enough evidence of misconduct already.

More on AMC:

AMC ON THE THRESHOLD LIST: STRONG EVIDENCE OF NAKED SHORT SELLING

HEDGE FUNDS LOSE $12 BILLION ON AMC AND GAMESTOP

HEDGE FUNDS’ AMC DOOMSDAY SCENARIO

(Full disclosure: I don’t have and have never had any position in any AMC securities, long or short. I just find the phenomenon of a 28-fold increase in a stock in 6 months interesting as an investor.)

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