Gary Gensler announced exclusively on Bloomberg (see below) that 90-95% of retail orders don’t go through the lit exchange.
The SEC Commissioner says these orders are rerouted to dark pools rather than the NYSE.
It was only a year after the ‘meme stock’ frenzy that the community receives this official news.
The ‘ape’ community has been labeled as conspiracy theorists but have proven to be correct time and time again on the market injustices that have been occurring for decades.
Here’s the latest market news.
Welcome to Franknez.com – Gary Gensler has confirmed the market manipulation that the ‘ape’ community has been exposing all for years now.
This is big for the retail community because for some time, ‘smart money’ was referring to investors as conspiracy theorists.
And can the SEC suspend dark pool trading?
Let’s dive right into it.
Gary Gensler on Dark Pools via Bloomberg
SEC Chairman and Commissioner Gary Gensler says payment for order flow is partly the reason why orders aren’t processed on the lit exchange.
He says retail orders go to wholesalers on an order-by-order competition.
Citadel’s Ken Griffin has praised PFOF stating it’s good for retail investors.
However, PFOF allows market makers to process retails orders in the ‘dark markets’, or dark pools.
This means retail buying volume is out of sync with AMC’s actual share price.
AMC’s share price is synthetic, it only reflects a small portion of buying volume.
Market Makers Have Been Stealing from Retail Investors
Market makers have been stealing from retail investors with absolutely no consequence from regulators.
Now that the cat is out of the hat, what is going to be done about it?
How does one account for all the orders that have been derailed from the lit exchange market and fix the share price to reflect the correct amount?
Banning PFOF is one thing but what about the money that has been masked by dark pools?
Will these financial institutions be held accountable for financial treason?
The integrity of the stock market has been tainted for far too long, now it’s time to take action.
Will PFOF get banned in the U.S?
According to Gary Gensler, PFOF is banned in the UK, Canada, Australia, and in Europe.
However, because the U.S has a very strong capitalist economy, it could prove to be difficult.
Gensler says, “I think it’s natural that we look to say, how do we drive great competition and efficiency in this market, and use the tools that congress has given us.”
Here the SEC Chairman is saying their solution is to find someone who can compete with these market makers rather than banning PFOF in general.
We’ve seen these efforts through the IEX exchange D-Limit order.
IEX is a lit exchange that reflects much more accurate share prices and eliminates the predatorial strategies used by market makers and hedge funds.
These strategies include PFOF and high frequency trading.
Recently, Citadel, Charles Schwab, and the NYSE have teamed up to destroy new SEC Proposals.
However, ‘We The Investors’ has challenged Wall Street by submitting more than 1,300 letters supporting the SEC’s proposals.
Retail Wants Orders Processed Through the Lit Exchange
The SEC is supposed to be protecting retail investors from nefarious market practices.
Therefore, it is the SEC’s duty to find a solution and locate the money that retail is missing.
Retail wants orders processed through the lit exchange.
Market makers do not have the consent to move retail money through dark pools or other foreign markets.
Can the SEC Suspend Dark Pools?
Yes, the U.S. Securities and Exchange Commission (SEC) has the authority to suspend dark pools if it believes that they are violating securities laws or posing a risk to investors or the integrity of the markets.
Dark pools are private trading venues that allow institutional investors to buy and sell large blocks of securities without revealing their trading intentions to the public.
While dark pools can provide benefits such as reducing market impact and improving execution quality, they can also raise concerns about transparency and fairness.
The SEC has taken action in the past to regulate dark pools and address potential abuses.
For example, in 2014, the SEC brought charges against a major dark pool operator for making false statements to investors about the operation of its trading platform, leading to a $12 million settlement.
In 2020, the SEC proposed rules that would increase transparency and disclosure requirements for dark pools.
If the SEC determines that a dark pool is engaged in unlawful activities or poses a risk to investors or the markets, it can suspend the dark pool’s operations, require it to take remedial actions, or take other enforcement actions as appropriate.
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