Whether retail investors manipulate stock prices tests us regulation

Whether retail investors manipulate stock prices tests us regulation

Photo: there is a screenshot of us shareholders’ 28 sun exposure on Robin Hood’s restrictions on users’ purchase of Gamestop shares. /Pictures on the Internet

[Ta Kung Pao] according to the Wall Street Journal, after the stock price of Gamestop skyrocketed, the stock buying boom swept through major social platforms in the United States, which also attracted complaints from the elite of Wall Street about the “manipulation of stock price” of the people who wanted to do so, demanding the securities and Exchange Commission (SEC) to crack down on market abuse and test the boundaries of regulatory rules.

On reddit’s Wall Street bets and other online forums, small investors can be seen everywhere encouraging others to buy more stocks and options, causing financial circles to worry about stock market shocks. According to people familiar with the matter, many informants urged the SEC to investigate the comments posted on websites such as reddit to determine whether any of them constituted fraud. On Wednesday night, the SEC said it was monitoring options and stock market volatility and assessing the situation with other regulators.

Generally speaking, fraudsters will first buy stocks that are not optimistic, then spread false information about the company’s prospects to push up the stock price, and then sell their shares to the cheated investors. Once these fraudsters sell the stock, the price of the stock usually falls back to the low level, causing the shareholders to suffer losses.

However, such investigations are usually protracted and need to prove that the perpetrators spread false information and deliberately manipulated prices. Former sec lawyer Frankel pointed out that the key question is whether someone has issued false or misleading information in order to induce others to buy shares. &”It may be impractical to sue hundreds of defendants, but it may work to sue a few key people on the ground that they are suspected of abetting any questionable transaction.

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