Investigations Into GameStop Trading And Reddit: Former SEC Enforcement Chief Provides Insights
Bruce Brumberg, JDN, 9 February 2021
The Reddit/GameStop aftermath continues. Now, it’s been reported, investigators at the US Securities and Exchange Commission (SEC) are allegedly scouring posts on social media and online message boards for evidence of fraud and coordinated stock-price manipulation in the hype that led to recent unlikely surges in the stock prices of GameStop, AMC Entertainment Holdings, and a few other companies.
What goes on in these types of SEC investigations? Are individual investors who contributed to the online buzz about these companies really at risk of SEC enforcement actions or criminal prosecution? What about the legality of the decision by trading app Robinhood and other online trading platforms to temporarily restrict trading in the stock of GameStop and the other targeted companies? Continue reading “Article: Investigations Into GameStop Trading And Reddit: Former SEC Enforcement Chief Provides Insights”
Reddit And GameStop Lessons: Former SEC Enforcement Chief Explains Stock Manipulation And How To Avoid Trouble
Bruce Brumberg, JD, 04 February 2021
As just about everyone knows by now, investors communicating on the Reddit forum WallStreetBets drove up the stock price of GameStop while openly discussing both their tactics and their reasoning. Some of them purchased GameStop shares as part of a strategy expressly intended to squeeze hedge funds that were shorting the stock. Others simply saw the stock as undervalued.
Will they face charges of stock-market manipulation from the SEC, or even criminal charges? What can investors legally say about a company that could move its share price? What trades can they make individually or together without risk of a government crackdown? Continue reading “Article: Reddit And GameStop Lessons: Former SEC Enforcement Chief Explains Stock Manipulation And How To Avoid Trouble”