Regulators are taking banks such as Morgan Stanley and multiple hedge funds to court.
Financial institutions have been receiving subpoenas ordering them to court after several investigations, more on that below.
Retail investors have been demanding the SEC and Justice Department take action for decades now.
Will this new wave of retail investors be the ones to spark change in the markets?
Welcome to Franknez.com – today’s market news is surrounding the crackdown of banks and hedge funds. Be sure to stick around and join the discussion in the comment section of the blog below.
Let’s dive right into it!
Regulators are taking financial institutions to court.
I will be updating this article as new information arises so be sure to join the newsletter to get notified.
Some of the biggest banks and hedge funds are getting dragged to court.
And while not all of the information is known yet, here’s what we do know.
Morgan Stanley & Goldman Sachs get subpoenas
Regulators are investigating communications between banks and hedge funds.
Morgan Stanley, based in New York is among the many firms reported to have received subpoenas.
Another bank you might recognize off the top is Goldman Sachs who’s already been known for notoriously manipulating commodities.
Morgan Stanley is one of the banks that funded private family office Archegos.
The bank lost billions of dollars when the private hedge fund defaulted last year.
Now these banks are receiving subpoenas; a court order to come to court.
Subpoenas may be used in both criminal and civil cases but often result in jail time or heavy fines if ignored.
Why are hedge funds and banks going to court?
Regulators are examining whether bankers might have improperly tipped hedge fund clients in advance of large share sales.
The report also says regulators are investigating whether banks also alerted favored clients ahead of public disclosures of trades, and if such information benefited the fund.
The Department of Justice is also investigating the matter.
We’ve seen this type of strategy play out in the past with GameStop and AMC early last year.
Insiders communicated about halting retail trades as they sold off their entire AMC and GameStop positions.
Meanwhile, retail investors were left helpless unable to buy the assets.
Further price surges from ‘meme stocks’ would have resulted in catastrophic losses for hedge funds and banks alike.
These events have yet to receive justice.
What will be the result?
Leave your thoughts below in the comment section of the blog.
I noticed mixed opinions on Twitter.
Some of you say the SEC and DOJ are finally taking action, others say they’re part of the problem too.
Let’s spark a discussion below.