DOJ Targets Muddy Waters for Flooding Market with Fake Orders

DOJ Targets Hedge Fund for Flooding Market with Fake Orders
Hedge Fund Under Investigation for illegal short selling strategies

The Justice Department is targeting Muddy Waters for flooding the market with fake orders.

This ongoing investigation is one of the many probes targeting hedge funds for illegal short selling strategies.

After the ‘meme stock’ frenzy early last year, retail investors have been demanding the SEC investigate hedge funds after they removed the buy button specifically for ‘meme stocks’.

AMC and GME stock continue to be heavily shorted today weighing in at a high +20% short interest each.

Will regulators release the pressure suppressing these stocks to create a short squeeze?

That’s what we’re here to find out.

Welcome to – if you’ve been actively demanding for change in the markets, your voice has finally sparked it. Here are the effects a year later.

Let’s dive right into it!

Short-seller Carson Block receives FBI search warrant

DOJ investigates Muddy Waters for flooding market with fake orders
DOJ investigates Muddy Waters for flooding market with fake orders

The Founder of Muddy Waters Research was served with a search warrant by an FBI agent.

Muddy Waters Research is a hedge fund based in San Francisco, California with $227 million AUM.

Federal prosecutors are investigating whether short sellers conspired to drive the prices of stocks down.

The DOJ is looking at hedge funds to identify illegal trading tactics in the markets.

We’ve seen tactics such as naked shorting, high dark pool trading, and OTC trading just to name a few.

Gary Gensler just announced on a Bloomberg exclusive that 90%-95% of retail market orders do not get processed through the lit exchange.

This real problem allows short sellers to abuse the tools they have at their disposal.

Who will give retail investors 90%-95% of their return?

Hedge fund under investigation for “spoofing”

Spoofing is the term given to a tactic that illegally ploys fake orders into the market in to drive the share price of a stock down.

Millions of retail investors have noticed spoofing during intraday trading in both AMC and GME stock for over a year now.

The buy-to-sell ratio has shown us that short sellers are using this tactic to end trading days on red even when 80%-90% of the orders were bought for.

Retail investors have been buying and holding these stocks en masse but for months now the price charts don’t correspond to the demand.

Spoofing is a technique that has suppressed AMC and GameStop’s share price for more than a year now.

While short selling in itself is not illegal, hedge funds have overleveraged their power ever since retail became a real competition.

Hedge funds such as Mudrick, Anchorage, and Archegos are a few who threw in the towel.

Citadel Securities received a $1.2 billion lifeline from Sequoia and Paradigm early this year too.

The hedge fund lost billions last year betting against ‘meme stocks’.

DOJ investigates hedge fund for “scalping”

Muddy Waters Hedge Fund under investigation
Muddy Waters Hedge Fund under investigation

Scalping is a term used when short sellers cash out their positions without disclosing it.

By not disclosing it, the share price of a security does not surge.

The DOJ is investigating hedge funds for this illegal short selling tactic.

If hedge funds have indeed been using scalping to suppress ‘meme stocks’, then this too would make a lot of sense.

I’d love to know your thoughts in the comment section of the blog below.

BREAKING: Citadel Under Investigation by Department of Justice

Will retail finally see price surges?

Retail investors want their assets to reflect the price of the true demand in the market.

*Regulators must lift the suppression imposed on stocks and let the share price run its natural course based on its supply and demand.

This is what activists must demand of our regulators.

Several short squeeze plays are bound to take off once hedge funds and market makers are prohibited from using predatorial strategies under law.

Read: Regulators are taking Morgan Stanley and hedge funds to court

Follow me on: Twitter | Facebook | Instagram | YouTube | LinkedIn


  1. Daniel Brooks

    Cramer describing how he uses lies about insider information to manipulate market prices for stocks he’s short on. This man should be in prison.


    We are loosing innovation companies and jobs to make Hedge Funds like Cramer and Citadel rich. And they brag about it, insult to injury

    The Failed to Deliver shares is evidence that shares are being sold and failed to deliver. For the size of the floats they are high.

  3. Daniel Brooks

    Hedge funds have criminally stolen billions from retail investors, and receive a million dollar fine. Just the cost of doing business for these crooks.

  4. ZZZman

    It’s almost as if 5 million people yell at you for a year you finally make a move. DOJ please prove that you’re not part of the problem and start the process of untangling this mess. I give Caesar and the rest of us credit for this.

  5. Deb

    Hi Frank…Thanks so much for the information! It’s unbelievable the lack of concern the Hedgies have for the rules, or obviously, lack there of. I’m a senior citizen, and I sure don’t want anyone taking money from me or anybody else. I know if I took any money, I would be in big trouble. Thanks for staying on top of this. It is much appreciated!

  6. Frank Nez

    Let’s start a discussion!

© 2024

Theme by Anders NorenUp ↑