As South Korean President Lee Jae-myung pledges stringent measures to combat stock manipulation and unfair trading practices, retail investors in the United States are intensifying their campaign to expose and eliminate illegal short selling, particularly “naked” short selling, in a bid to restore integrity to financial markets.
The movement, fueled by grassroots activism and amplified through social media platforms like X, is gaining momentum, drawing parallels to global efforts to safeguard investors and revitalize confidence in stock markets.
On June 11, 2025, President Lee Jae-myung visited the Korea Exchange in Seoul, vowing to eradicate unfair trading practices and restore trust in South Korea’s financial markets.
During an on-site meeting, Lee emphasized severe penalties for illegal transactions, including maximum fines and imprisonment, and proposed proactive measures like suspending accounts suspected of fraudulent activity.
His administration aims to reverse the perception that South Korea’s stock market tolerates manipulation, with Lee targeting a KOSPI index of 5,000 during his term.
The KOSPI has already risen 7.71% since his administration’s launch, reflecting market optimism.
Lee’s policies include tax reforms to boost dividend income and a zero-tolerance stance on white-collar crimes like stock manipulation.
“If you make money from illegal transactions, you will pay many times more,” Lee declared, signaling a tough new era for South Korea’s financial oversight.
These measures resonate globally, as markets worldwide grapple with similar challenges.
U.S. Retail Investors Take a Stand
In the United States, retail investors, emboldened by the GameStop and AMC trading frenzies of 2021, are pushing for systemic reforms to address illegal short selling, particularly “naked” short selling—where shares are sold short without being borrowed or located.
This practice, which can artificially depress stock prices, has long been a point of contention for retail investors who argue it undermines market fairness.
Grassroots advocacy group We The Investors has urged President Donald Trump to issue an executive order banning naked short selling and imposing strict penalties for failures to deliver (FTDs) shares.
The group’s campaign, highlighted on X, emphasizes restoring market integrity and protecting retail investors from manipulative practices by hedge funds and market makers.
Posts on X reveal widespread frustration among retail investors.
One user reported that on a single day, over 38 million shares were naked shorted, far exceeding the 1.5 million shares available to borrow, calling it a blatant violation of U.S. securities law.
Another post celebrated a new detection system uncovering cases of illegal short selling, spotlighting stocks like AMC, GME, and MMTLP.
The MMTLP saga, where retail investors allege regulators allowed naked shorting to persist unchecked, has become a rallying cry.
Over 7,000 retail investors signed a petition demanding a temporary ban on all short selling to investigate naked shorting, with some calling for direct intervention from high-profile figures like Robert F. Kennedy Jr. and Devin Nunes.
Meanwhile, over 40,000 letters have been sent to congress regarding the fraud behind MMTLP.
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A New System to Detect Manipulation
Recent advancements in market surveillance are bolstering the fight against illegal short selling.
A new system designed to detect unauthorized short sales has already identified two cases, sparking optimism among retail investors.
This development, shared widely on X, underscores the growing technological capacity to hold bad actors accountable.
Critics argue that regulators like the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) have been slow to act, often prioritizing hedge funds over retail investors.
One X user claimed the U.S. stock market is “riddled with counterfeit (naked short) shares,” warning of a potential collapse if the issue gains wider attention.
The U.S. movement mirrors South Korea’s crackdown, as both nations confront the “discount” plaguing their stock markets—South Korea’s due to distrust in fair trading, and the U.S.’s due to perceived regulatory inaction.
Lee’s pledge to eliminate the “Korea discount” by doubling the KOSPI to 5,000 aligns with U.S. retail investors’ calls for reforms to unlock the true value of American stocks.
Analysts suggest the U.S. could adopt measures similar to South Korea’s, such as enhanced monitoring systems, stricter penalties for FTDs, and incentives for transparent corporate governance.
A proposed executive order to curb naked short selling, as advocated by We The Investors, could align U.S. policy with global trends toward market fairness.
Also Read: There Is Now A Call For President Trump To Ban Naked Short Selling
Why This Matters
Social media, particularly X, has been a game-changer for U.S. retail investors, enabling them to organize, share evidence of market manipulation, and pressure regulators.
Posts calling out naked shorting in specific stocks or praising detection systems have garnered thousands of views, amplifying the movement’s reach.
This digital activism echoes the public fervor behind South Korea’s political and economic reforms, where Lee’s policies have been shaped by public demand for change.
As South Korean President Lee Jae-myung takes decisive action to restore investor confidence, U.S. retail investors are drawing inspiration while pushing their own agenda.
The convergence of grassroots activism, technological innovation, and global policy shifts is creating a new paradigm for financial markets—one where transparency and fairness are non-negotiable.
With the KOSPI surging and U.S. investors rallying for reform, the global fight against unfair trading practices is heating up.
Whether through executive action or regulatory overhaul, the voices of retail investors are growing louder, demanding a market that works for all.
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