Congress Has Now Released a New Report on MMTLP
Congress has now released a new report on MMTLP after investors successful gained the attention of several members as well as other regulators, such as FINRA and the SEC.
In mid-July, Congressman Eli Crane, 2nd District of Arizona, submitted a letter to both SEC Chairman Gary Gensler and the House Financial Services Committee Chairman Patrick McHenry relating to the MMTLP fraud allegations.
By late-July, a total of 15 congress members had signed a letter requesting an MMTLP update from SEC Chairman Gary Gensler regarding the events that led to the U3 halt in December of 2022, which resulted in disastrous losses for investors.
Since then, no further updates have been announced, until today.
The Congressional Research Service released a new report on MMTLP following the abnormal trading which attracted the attention of many market participants as well as US regulators.
Congress also acknowledged our report on how 40,000 letters were sent out (as well as other reports), which couldn’t have happened without the community — so, thank you.
However, investors say the report published by the Congressional Research Service serves no justice as it fails to explain with detail why the events in MMTLP occurred in the first place.
Furthermore, the report places the MMTLP incident under the ‘meme stock’ umbrella, which was and is a completely different event, culture, and round of stock tickers.
“Like the GameStop event, the price appreciation was fueled by social media valuation discussions despite some research analysts’ belief that MMTLP shares were “worthless””, said the report.
What the CRS report nailed down however, is that FINRA’s U3 halt indeed prevented investors from exiting their positions as planned.
While the report published was short, investors want more.
Let’s break it down together.
Congress MMTLP Report
The latest congress MMTLP report goes over what short selling in the market is and how short sellers profit.
They also explain the nature of a short squeeze and how MMTLP investors anticipated one prior to the U3 halts, which some investors may argue whether or not they were in the trade for one.
Under Policy Discussions, Congress acknowledges that investors suffered significant losses due to the risks of the trade but fail to hold FINRA accountable.
“Some Members of Congress sent letters to the primary capital market regulators, the Securities and Exchange Commission (SEC), to voice concerns about investor retirement savings losses.
They also requested further investigations into the MMTLP transactions to identify any regulatory or legislative gaps that could be addressed in order to enhance investor protection and market integrity.
Potential policy concerns include:
- Whether investors knowingly entered into risk-taking with a full understanding of material information and without misleading guidance from social media or elsewhere. For example, the SEC has charged social media influencers with manipulation schemes in the past.
- Whether there are better ways to provide transparency and clarity regarding risk disclosures that could enhance market integrity and reduce market disruptions. For example, retail investors and experts (e.g., OTC Markets Group’s vice president) were reportedly confused about MMTLP’s final trading date. As such, investors may not have been able to optimize their investment decisions.
- Whether there is the existence of fraud and manipulation, such as illegal forms of naked shorts and counterfeit shares, that could distort markets.
- Whether there are signs of insider trading and pump and dump. For example, Brda’s MMTLP transactions have drawn related suspicions.”
Congress has without a doubt acknowledged many validating concerns.
The big question here is why isn’t anything being said about the transcripts between the SEC and FINRA regarding a fraud investigation in MMTLP prior to the U3 halt and delisting?
This report confirms that both the SEC and FINRA already had something on their radar, something investors had absolutely no knowledge of at the time.
You can read the full Congress report here.
I expect we will receive another update as investigations deepen. Share this article to raise awareness.
This is a developing story – for more market news and updates, join the newsletter below or follow me on social media.
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