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ARK Innovation ETF (Cathie Wood )Is Selling Off — and It May Get Worse
ARK Innovation ETF (Cathie Wood )Is Selling Off — and It May Get Worse

One of the hottest exchange-traded funds is sliding again, and the selloff may only get worse.

Dogecoin surges 55% as fans try to push it to $1
Dogecoin surges 55% as fans try to push it to $1

Dogecoin (DOGE-USD) has nearly doubled in value since April, rising over 50% after another surge driven by internet users who are trying to push the coin to $1, as similar plans for "Doge Day" fell flat last month.

Cocrystal Pharma stock doubles on massive volume shortly after progress on coronavirus drug candidates
Cocrystal Pharma stock doubles on massive volume shortly after progress on coronavirus drug candidates

Shares of Cocrystal Pharma Inc. COCP, +72.58% more than doubled on massive record volume in afternoon trading

1000 USD bet on Dogecoin for Christmas now tops the average US Income
1000 USD bet on Dogecoin for Christmas now tops the average US Income

It took Amazon 13 years to deliver a 10,000% return to investors. It has now taken Dogecoin five months. The cryptocurrency (DOGE-USD) hit a new all-time high of $0.60 on Tuesday, pushing Dogecoin's market cap north of $70 billion to become the fourth-most valued coin, according to Yahoo Finance's data partner CoinMarketCap. That's now larger than the market cap of Moderna, one of the companies shipping COVID-19 vaccines to save the world from the pandemic.

Exclusive: SEC Hunts for Fraud in Social-Media Posts Hyping GameStop

U.S. Securities and Exchange Commission investigators are combing social media and message board posts for signs that fraud played a role in dizzying stock swings for GameStop Corp., AMC Entertainment Holdings Inc. and other companies, according to people familiar with the matter.

The scrutiny is being done in tandem with a review of trading data to assess whether such posts were part of a manipulative effort to drive up share prices, said the people, who requested anonymity because the review isn’t public. The regulator is specifically on the hunt for misinformation meant to improperly tilt the market, the people said.

The prevailing narrative is that Wall Street short-sellers were caught flatfooted over the past two weeks as retail traders banded together via Reddit message boards and bought up stocks that hedge funds were betting against. But some market participants, including famed short-seller Carson Block, have started to speculate that the short squeezes that drove GameStop, AMC and other stocks to exorbitant heights might have also involved professional investors who either took advantage of the Reddit-fueled frenzy or helped hype it.

The SEC hasn’t said whether there’s anything to Block’s theory, but acting chair Allison Herren Lee said in a statement earlier this week that the agency was looking at “compliance with regulatory obligations, adequate and consistent risk disclosure, and determining if any fraudulent or manipulative behavior has occurred.”

There is also mounting concern about the possibility of bot activity in Reddit’s WallStreetBets chat after a spokesperson for the forum told CBS News that there was a “large amount” of it and that some posts were being blocked by an automated moderation system.

Brad Bennett, a former enforcement chief for brokerage regulator the Financial Industry Regulatory Authority, said cases involving talking up stocks aren’t easy because they often require evidence that someone made a material misstatement of fact.

“It’s no crime to go on a website and say, ‘I think the stock’s going to go up,”’ Bennett said. “If people choose to follow you, none of that’s a violation or a crime either.”

While shares of GameStop have sharply retreated this week, pressure is growing on the SEC to figure out what happened. Senator Elizabeth Warren, one of Wall Street’s leading critics in Washington, has demanded that the SEC investigate the “casino-like swings.” Both the House and Senate are planning to hold hearings on the market mania, which triggered big losses for some retail investors and prompted Robinhood Markets, whose app was used by many of the traders, to raise $3.4 billion to cover collateral demands.

Treasury Secretary Janet Yellen has also called for a meeting of U.S. financial regulators including the SEC, taking her first public step to address the tumult.

“Secretary Yellen believes the integrity of markets is important and has asked for a discussion of recent volatility in financial markets and whether recent activities are consistent with investor protection and fair and efficient markets,” the Treasury Department said in a late Tuesday statement.

While the SEC doesn’t regulate social media or message boards, the agency has brought cases against people accused of making false claims about stocks online. In one case in 2000, the agency went after a 15-year-old for buying microcap stocks and then hyping the shares before quickly selling them for a profit. The teenager agreed to repay more than $270,000 in profit to resolve the allegations. In December, the SEC sued a day trader for planting false rumors about companies.

QuickTake: Robinhood’s Role in the ‘Gamification’ of Investing

Regulators typically start their investigations by using algorithms to hunt through tons of data to try to spot suspiciously well-timed trades, including signs that such bets were coordinated, Bennett said. Then they would try to match up those trades with posts on social media, while sorting out who wrote the posts and what their intent was, he said.

“It’s not something that’s ever resolved in hours, or even days,” Bennett said. “It’s hard gumshoe work.”

For the reasons Bennett outlines, SEC investigations often take months or even years to complete so it’s likely that the GameStop tumult will be long over by the time the probes wrap up. Still, the agency’s findings could have implications for the broader retail market and lead to policy changes for short-selling, trade settlement, online apps and disclosure rules.

The SEC is also looking at how brokerages handled increased volumes and decided to restrict trading during the surge, according to the people. The agency is looking into whether the firms complied with rules and were consistent in how they made disclosures to their clients across the board when limiting transactions.

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