The SEC Looks For Fraud In GameStop Case

Uh oh...

According to Bloomberg, US Securities and Exchange Commission investigators are looking through social media for signs that fraud played a role in the GameStop, AMC and other meme stock rallies.

Bloomberg said people familiar with the matter told them that posts are being searched in tandem with a review of trading data to assess whether they were part of a "manipulative effort to drive up share prices."

The SEC seem to have a habit of only investigating "the little guy"...

(I'm thinking back to the Flash Crash investigation)

Oh, and talking about that...

He is, of course joking!

But that's enough of the crazy conspiracy theories.

The report said that some market participants, including short-sellers Carson Block, believe the short squeezes might have involved professional investors taking advantage of the frenzy.

"The Commission is working closely with our regulatory partners, both across the government and at FINRA and other self-regulatory organizations, including the stock exchanges, to ensure that regulated entities uphold their obligations to protect investors and to identify and pursue potential wrongdoing," the SEC said in a statement last week.

They may not have to look too hard...

Take a look at this article posted by Tim in the Macrodesiac Discord channel this morning...

It turns out the guy that set off the GameStop frenzy (username "DeepFuckingValue" on Reddit) was a so-called "suit" who held multiple "highly sophisticated" licenses to trade and supervise others on Wall Street, according to the report.

An open and shut case!

While that may be enough to satisfy investigators, there have also been concerns raised about potential bots in Reddit's WallStreetBets chat after someone from the forum stated there was a large amount of bot posts.

The SEC's pressure to act is increasing, with Treasury Secretary, Janet Yellen set to meet with financial regulatory groups about the stock spike and Senator Elizabeth Warren calling on the regulatory body to investigate.

Whatever happens, and even with the knowledge that the guy who started the whole thing was in fact a Wall Street trader, if its anything like the flash crash case, it could take a few years to fully investigate.

Oh and just in case you were wondering, GameStop shares closed up 2.68%, while AMC shares closed 14.71% higher on Wednesday...

A boring day tbh.