Tag: SEC Lawsuit

Wall Street Threatens to Sue SEC if New Proposals Pass

Market News Daily - Wall Street Gets Ready to Sue SEC if Proposals Pass.
Market News Daily – Wall Street Threatens to Sue SEC if New Proposals Pass.

Wall Street is threatening to sue the SEC if proposals that will change how retail orders are executed gets passed.

Gensler has been critical of payment for order flow (PFOF), whereby some retail brokers (including Schwab, ETrade and Robinhood) route orders to electronic market makers known as wholesalers (including Citadel and Virtu), who pay the brokers for access to that order flow.

These wholesalers may send the orders to exchanges and profit from spreads or even from price direction through the derivatives market, hence the major conflict of interest.

SEC Commissioners Hester Peirce and Mark Uyeda, both Republicans, also filed statements opposing the proposal. 

“This latest effort to order competition threatens to create disorder in the capital markets, the functioning of which is so important to the rest of our economy,” Peirce wrote in a statement. 

The Intercept wrote a piece on Hester Peirce in 2015 titled, “SEC Nominee To Oversee Wall Street Works At Think Tank Dedicated To Blocking Regulation.”

And according to the research, Hester Peirce received 98% of her salary from the Mercatus Center, a “think tank” that provides an academic façade to a radical anti-regulatory agenda.

In other words, Hester is a plant on the SEC meant to cater to Wall Street, not retail investors.

‘We The Investors’ Challenges Wall Street

‘We The Investors’ is taking Wall Street head on.

More than 1,300 letters have been submitted to the SEC supporting rules proposed in December that represent the biggest changes to equities trading in nearly two decades, according to Reuters.

The collective of retail investors have joined ‘We The Investors’ led by Dave Lauer in efforts to combat Wall Street as a legitimate organization that sprouted from the events of the ‘meme stock’ frenzy in 2021.

We The Investors has held two online meetings since December with SEC Chair Gary Gensler, who took questions directly from retail investors on the proposals, which include requiring most retail stock orders to be sent to auctions to boost competition.

Other proposed rules call for a new standard for brokers to demonstrate they’ve gotten the best execution for clients on transactions, as well as lower trading increments and access fees on exchanges, and stronger disclosure around retail order executions.

But Wall Street is pushing back.

The NYSE teamed up with retail broker Charles Schwab Corp and market maker Citadel Securities earlier this month to ask the U.S. Securities and Exchange Commission to withdraw two recently proposed rules aimed at revamping how stocks trade.

The move represents a coordinated industry push back against what are potentially the most impactful proposals in the SEC’s biggest attempt to reform stock market rules in nearly 20 years.

The Securities and Exchange Commission scrapped plans to vote Wednesday on a rule that would have increased regulators’ visibility into financial risks at some hedge funds and private equity funds.

After scheduling the vote last week, the five-member commission “decided to take a little more time” on the rule, an SEC spokeswoman said.

The SEC Faces Potential Lawsuits from Wall Street

Market News Today - Wall Street Gets Ready to Sue SEC if Proposals Pass.
Market News Today – Wall Street Gets Ready to Sue SEC if Proposals Pass.

Wall Street institutions are already threatening litigation if the proposals go through. 

“Ultimately, it’s going to end up, unfortunately, sadly, probably in litigation [if Gensler] decides to go down this road,” Virtu CEO Doug Cifu said in an interview at the Securities Traders Association of New York conference on March 27th at the NYSE. 

Cifu specifically cited the Administrative Procedures Act (APA), which governs the way government agencies may propose and establish regulations. 

The SEC must follow procedures outlined in the APA.  If not, it can get sued. 

Gensler is proposing a new rule, Regulation Best Execution, that would establish a national best execution standard to ensure broker-dealers send orders to the venue that will get the best price for buyers and sellers.

But FINRA is currently in control of the best execution rule, a rule Gensler believes the SEC should have, not FINRA.

FINRA is under serious scrutiny due to many scandals with the most recent having to do with the U3 halt and delisting of MMTLP stock.

Retail investors have also criticized the SEC for kneeling to Wall Street and failing to protect small investors from predatorial market practices.

Many in the retail community say SEC commissioners should be voted in, not appointed by the U.S. President.

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Market News Today - Wall Street Gets Ready to Sue SEC if Proposals Pass.
Market News Today – Wall Street Gets Ready to Sue SEC if Proposals Pass.

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Chairman Gensler Says He Understands Retail’s Frustrations

Gary Gensler We The Investors
Chairman Gary Gensler talks dark pools, conflicts of interest, and more with We The Investors.

In an interview with We The Investors, SEC Chairman Gary Gensler says he understands retail investors’ frustrations.

Hosted and led by Dave Laurer, a We The Investors panel had direct communication for the first time with Gary Gensler, representing the retail investor community as an entirety.

In this article, I break down key moments of the interview where the SEC Chairman answers questions retail investors have been yearning for.

Be sure to share this article within your community.

You can follow me on Twitter where I publish market news and updates daily and keep the retail community informed on the latest market analysis and trends.

Let’s begin.

Gary Genlser on Predatorial Short Selling

Gary Gensler on predatorial short selling.
Gary Gensler on predatorial short selling.

One of the biggest concerns the retail investor community has had, not just over the past few years since the beginning of the ‘meme stock’ frenzy, but a decade back is that of predatorial short selling practices.

The SEC Chairman says that short selling is a challenging area where the SEC is still working and pursuing focus on.

One of the biggest challenges according to Chairman Gensler is that Wall Street powers will send stacks of reports highlighting rebuttals on proposals aimed at protecting retail investors.

This is primarily because certain proposals aimed to protect retail conflict with Wall Street money.

And because these firms are market participants, like retail investors, these documents must be legally reviewed.

The challenge only grows when Wall Street firms open lawsuits against the SEC when certain proposals become a direct hinderance to the way these companies perform.

Later in the interview, the retail community is strongly urged to fight back by directly addressing issues and concerns to the SEC, similar to Wall Street.

And I think We The Investors has officially opened that door.

But more on that below.

Here are two big proposals the SEC has in the works that aim at protecting retail investors.

T+1 Settlement Cycle

We are currently in a T+2 settlement, which is basically the number of business days it takes for orders to execute.

Faster settlement cycles such as T+1 gives retail investors faster order execution.

The SEC Chairman says about a year ago, the SEC put out a proposal on shortening the clearing cycle to protect market participants from getting locked out of trading, like how they did during the ‘meme stock’ frenzy.

Gensler says, “I’m not legally allowed to pre-judge where we’ll end up in all these things, but I’m really encouraged by the support we have to shortening the settlement cycle to 1-day.”

“I’m encouraged also about a lot of the support we have to bringing greater transparency to short selling.”

Conflicts of Interest Proposal

Gary Gensler also said in the interview with We The Investors that he is very hopeful that the SEC will put out some proposals about the inherit conflicts of interest that go into predictive data analytics that targets certain users with one set of props versus other props.

He’s very well aware about the conflicts of interest in the market, now it’s going to be up to retail investors to get involved and accept these proposals by writing back to the SEC once they have been made available.

Do Dark Pools Suppress the Price of a Stock?

Gary Gensler on dark pools.
Gary Gensler on dark pools.

Dave Laurer asked the SEC Chairman if dark pools suppressed the price of stock and whether retail investors could influence the price of a stock if majority of orders traded in the lit exchange.

While there was no direct answer to the suppression of price, the Chairman says that with so much trading happening off-exchange, he doesn’t think it’s a leveled playing field as dark pools give institutions an unfair advantage.

Retail investors as individuals don’t have the power to move the markets, but retail orders combined could have significant price impact.

Having worked in Wall Street for 18 years, Gary Gensler says he understands retail’s frustrations and understands the conflicts.

He is urging retail investors to weigh in heavily on SEC.gov.

The chairman almost empowers retail to fight back by submitting letters and comments to the SEC directly oppose to thinking change will happen merely from social media.

While social media is a great tool to raise awareness, the SEC Chairman urges the retail community to weigh in on the SEC’s website.

Final Words for Retail

Gary Gensler says his term isn’t up until 2026, but he hopes he and his team do right by the American public and are able to do the best they can for everyday investors.

His biggest encouragement for the community is to weigh in so that all commissioners gain broader perspective.

We The Investors, led by Dave Laurer, is opening the door for retail investors to have a respected place in the financial markets.

The interview marks a historic turning point for retail investors and establishes the retail community as a real organization with real ideas to battle fraud and corruption in our financial system.

You can watch the full interview with SEC Chairman Gary Gensler below.

Leave your thoughts in the comment section down below and don’t forget to share this article.

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The SEC Names MMTLP In Pump and Dump Scheme Lawsuit

MMTLP Lawsuit
Market News: MMTLP stock is named in Pump and Dump lawsuit.

According to the SEC, MMTLP is one of the tickers Atlas Trading was pumping.

The SEC recently charged a trading group, including @MrZackMorris for pumping a variety of stock tickers on their discord, per Bloomberg.

Regulators are saying eight members of the trading group took advantage of novice traders by promoting false information on certain tickers to increase buying power and then later taking profits while still pushing traders to buy.

Many retail investors are more concerned about the SEC not taking other serious matters into their own hands, such as market manipulation conducted by hedge funds and market makers for example.

It seems when retail traders are able to profit from driving price up in a security, the SEC is quick to sniff out anomalies.

But when big hedge funds use the media to manipulate and influence public opinion, dump shares, trade puts, and downgrade stock prices, the SEC is nowhere in sight.

While promoting false information is still wrong, Meta Materials (MMTLP) seems to have a strong community behind it though, with many protesting against FINRA halting it a week prior to its spinoff.

Here’s the latest MMTLP stock news.

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Meta Materials Named in Lawsuit

MMTLP Metal Materials News
MMTLP Lawsuit | MMTLP Stock News Today – MMTLP pump and dump lawsuit.

The group used the then-upcoming merger with Meta Materials as a catalyst for their followers to buy in.

Hennessey claimed that Meta Materials would potentially partner with Tesla (TSLA) and had coronavirus-fighting applications in store.

He noted to his followers that the company had a “10-billion-dollar MARKET CAP POTENTIAL.”

This of course was a way to promote buying shares of the company for the leaders to profit from.

Source(s): InvestorPlace

Based on the lawsuit, the eight individuals will face disgorgement of all their illegal gains and pay civil penalties.

They may also be banned from trading securities in the future and face jail time, as criminal charges have been filed against them, per the SEC.

Did FINRA halt MMTLP stock due to these whereabouts?

And is it fair that shareholders who weren’t part of the fiasco were halted without warning?

Leave Your Thoughts Below

Is the MMTLP community completely separate from what went on with Atlas Trading Group?

Were you invested in the security?

Leave your thoughts in the comment section below.

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Virtu is Suing the SEC Over Records Request

Market News: Virtu sues SEC | Doug Cifu.
Market News: Virtu sues SEC | Doug Cifu.

Virtu Financial Inc is suing the SEC, alleging on Tuesday its primary regulator had not responded to a public records request.

Virtu, a market maker with a large equities business, said it submitted a Freedom of Information Act (FOIA) request in June to determine if the SEC had met legal requirements to evaluate potential investor harm and market risks while considering new rules for the handling and execution of retail stock orders.

The SEC declined to comment.

The FOIA request sought, among other things, communications between SEC Chair Gary Gensler and various stakeholders involved in retail stock trading.

“What we’re doing is exercising our rights as citizens … to understand what this Chair is looking at and who he’s meeting with,” Virtu Chief Executive Doug Cifu told Reuters.

“We think it’s important that there be clarity and transparency — that’s what the SEC requires of us as a listed company, so we’re just taking that same standard and saying, be transparent in how you’re dealing with potentially seismic changes to equity market structure,” he added.

Cifu has said Virtu may sue the SEC over other potential rule changes Gensler outlined in June.

What Does the Market Maker Fear?

Virtu SEC Lawsuit Update.
Virtu SEC Lawsuit Update.

The industry has attacked the SEC as several plans to level the playing field for retail investors have been proposed, one being the ban of PFOF (payment for order flow).

Now it seems market makers such as Virtu want to know ahead of time what the SEC is up to in order to act now.

Virtu suing the SEC speaks volumes since majority of retail investors have doubted the SEC has true power to create any change in the market.

I’m curious to know what you think.

Leave your thoughts in the comment section down below.

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