Tag: SEC News (Page 1 of 5)

SEC Scraps Vote for Hedge Fund Transparency Rule

SEC Scraps Vote for Hedge Fund Transparency Rule
Market News Daily: SEC scraps vote for hedge fund transparency rule.

(WSJ) 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.

She declined to comment on whether the cancellation owed to a lack of majority support from the commission, which is composed of three Democrats and two Republicans.

Several SEC commissioners could not immediately be reached for comment.

The rule, proposed early last year over Republican opposition, would have increased reporting requirements for filers of a confidential document called Form PF.

Among other proposed changes, it would have required large hedge funds to file reports within one business day of incidents such as extraordinary investment losses, defaults by major counterparties or spikes in margin requirements.

The rule sparked pushback from lobbyists for the hedge-fund and private-equity industries in Washington.

The Managed Funds Association, which represents hedge funds, urged the SEC last week to hold off on finalizing the rule until it was ready to adopt a separate Form PF proposal issued last August.

Who is the Managed Funds Association?

Who is the managed funds association?
Who is the managed funds association? Citadel’s Ken Griffin.

The Managed Funds Association, or MFA, is an association made up of a variety of hedge fund managers, including Citadel, Two Sigma, Point72, and Millennium Management.

That’s right, some of the industry’s biggest short sellers and the SEC just prolonged this transparency rule.

Citadel, Anchorage (defaulted), Millennium Management, and Bank of America are a few of the members who are or have been short on ‘meme stocks’ such as AMC Entertainment.

For years now, retail investors who were part of the events that occurred in 2021 have urged the SEC to enforce proper regulation from sneaky hedge funds and banks with overleveraged short positions.

The SEC has sparked excitement within the retail community when it’s announced proposals that would shed light on darker markets — however, trust has been severed as the regulator has only proved to be complicit to market injustices.

Dark pools, OTC trading, and naked shorting have suppressed retail’s favorite company stocks from rising on true demand.

Shorting has its purpose and is a useful tool to keep the markets balanced and in check.

Manipulative shorting on the other hand is what retail activists are fighting against — the un-American type that sinks businesses and disrupts innovation.

Northwest Biotherapeutics sued Citadel and other market makers for manipulating its stock price in December of 2022.

Ken Griffin’s Citadel chose to profit from the US cancer drug company through the means of short selling, a practice the hedge fund/market maker is notoriously known for.

Rather than allow the company to raise money for its treatments, hedge funds teamed up to profit from manipulated falling share prices.

But the lawsuit comes as no surprise to the retail community as Citadel has a long history of market manipulation.

Retail Investors Organize and Fight Back

Market News Daily: SEC Scraps Vote for Hedge Fund Transparency Rule.
Market News Daily: SEC Scraps Vote for Hedge Fund Transparency Rule.

‘We The Investors’ is taking Wall Street head on which means retail investors from around the world are now being represented in a way like never before for the first time in history.

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.

Halts in AMC, GameStop, and other stocks during at the time angered many investors which led to the exposure of crime and market injustices on social media.

Retail investors have been pushing for market transparency ever since.

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, including Ken Griffin’s Citadel is pushing back.

Related: “The Game is Rigged”, Says Ex-Citadel Data Scientist

Market News Published Daily

Market News Daily: SEC Scraps Vote for Hedge Fund Transparency Rule.

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MMTLP Scandal Recognized as Biggest Wall Street Fraud

Market News Daily: MMTLP scandal gets recognized as one of the biggest Wall Street fraud events.
Market News Daily: MMTLP scandal gets recognized as one of the biggest Wall Street fraud events.

The MMTLP scandal is being recognized as one of the biggest Wall Street frauds of the decade.

One of the most recent scandals has been that of the ‘meme stock’ frenzy when broker firms, hedge funds, and even regulators colluded to stop AMC, GameStop, and other stocks from rising.

Investors who held shares of MMTLP stock on the record date of December 12 would receive a preferred dividend of Next Bridge Hydrocarbon on Wednesday, December the 14th.

Investors anticipated a long-awaited MMTLP short squeeze during the last few trading days prior to the spinoff — primarily due to big buying volume flooding the market to receive Next Bridge Hydrocarbon shares.

However, MMTLP stock stopped trading on Thursday, December 8 after FINRA delisted the security without notice or warning.

FINRA released the following statement:

“Effective Friday, December 09, 2022, the Financial Industry Regulatory Authority, Inc. (“FINRA”) halted trading and quoting in the Series A preferred shares of Meta Materials Inc. (OTC Symbol: MMTLP).

Pursuant to Rule 6440(a)(3), FINRA has determined that an extraordinary event has occurred or is ongoing that has caused or has the potential to cause significant uncertainty in the settlement and clearance process for shares in MMTLP and that, therefore, halting trading and quoting in MMTLP is necessary to protect investors and the public interest.

The trading and quoting halt will end concurrent with the deletion of the symbol effective Tuesday, December 13, 2022.”

“See also Form S1 Registration Statement for Next Bridge Hydrocarbons, Inc. stating that…immediately after the Spin-Off, all shares of Series A Non-Voting Preferred Stock of Meta shall be cancelled. Available here.”

Next Bridge Hydrocarbons Weighs In

In simple terms, FINRA’s only explanation was that the halt was due to ‘uncertainty’ in the settlement process which could harm investors and public interest.

And perhaps that’s true — though shareholders don’t think they were referring to retail investors at all, but rather FINRA’s private investors and institutional partners, the hedge funds.

Next Bridge Hydrocarbons released the following statement regarding the MMTLP halt.

“We recognize that some of our shareholders who owned Meta’s Series A Non-Voting Preferred Stock prior to the Spin-Off might have been affected by FINRA’s halting of the trading in that stock while the Company was still wholly owned and controlled by Meta.

The current board and officers of the Company have no information from FINRA regarding the Trading Halt other than the information in the public notice published by FINRA announcing the Trading Halt.

Further, FINRA did not provide any advance notice to the Company or Meta prior to its initiating the Trading Halt.

While we were not involved in the Trading Halt, we certainly empathize with anyone adversely affected by the Trading Halt and are assessing the matter.

The Company believes that our primary means of delivering shareholder value is to develop our interests in the Orogrande Basin, and we remain focused on this objective.”

But investors remain confused as to what happened to their money which was frozen from trading prior to the delisting.

What’s happened with MMTLP has become one of the biggest Wall Street frauds in financial history.

Real People Have Been Affected

Market News Daily: MMTLP scandal gets recognized as one of the biggest Wall Street fraud events.

“It was the anniversary of my husband’s passing; it was a really hard time. My kids all understood what was happening with MMTLP, and it was hard for them to understand, it was hard for me to admit to my kids the depth of the dishonesty, and lying, and cheating, and stealing that goes on in our country”, says MMTLP investor Deborah W.

“I went through the 18 months of just stringing me and my family and everyone everybody with holding off on things that we might have wanted to do; vacations we wanted to take, because I didn’t want to pull any of the money out of what I had in. And MMTLP, I had liquidated other positions, I took every spare dime we had, and I put it towards MMTLP”, says Huck, another MMTLP investor.

FINRA placed a U3 halt on MMTLP on the final days before it was delisted.

It was one of three U3 halts in the OTC market in U.S. history.

The U3 halt froze MMTLP shares so shareholders couldn’t buy nor take their money out from the security.

MMTLP was delisted, robbing MMTLP investors of their money right in front of their eyes.

The delisting protected hedge funds from having to close their short positions right before shares of MMTLP stock began to rise, or squeeze.

Retail investors are naming the MMTLP scandal one of the biggest Wall Street frauds in financial history.

Investors lost their entire retirement funds and life savings in MMTLP.

Aside from the public announcements in the beginning of this article, FINRA nor the SEC have been able to explain truly what happened to investors shares of Next Bridge Hydrocarbons, or their money invested in MMTLP stock.

In the video below, MMTLP Studios goes over possible solutions the SEC and FINRA can take to make things better, along with other investor comments.

Were You Affected by the MMTLP Wall Street Fraud?

First, I’d like to say that my heart goes out to those affected by this unfair and unprecedented event in MMTLP.

Many investors in several communities are experiencing blatant manipulation in their favorite company stock in similar or their own unique way.

Raising awareness is the first step to getting the message seen.

I’ve seen and heard some of your stories through the community.

If you were affected by the MMTLP Wall Street fraud and would like to share your story, please feel free to comment it down below for other retail investors to see.

Share this article to get your voice and story heard.

Market News Published Daily

Market News Daily: MMTLP scandal gets recognized as one of the biggest Wall Street fraud events.
Market News Today – MMTLP Scandal Recognized as Biggest Wall Street Fraud.

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AMC Stock Plunges After Being Removed from the Threshold List

AMC Removed Threshold List
Market News Daily – AMC removed from threshold list.

AMC Entertainment (NYSE:AMC) stock plunges after being removed from the NYSE Threshold Securities List; this should not be happening.

The SEC (Securities and Exchange Commission) violated the 13-Day Threshold List Rule after AMC remained listed for more than 25 consecutive days.

AMC CEO Adam Aron said on Twitter he asked the NYSE and FINRA to look into the stock due to the alarming amount of FTDs in market.

But the CEO never publicly demonstrated a letter confirming the bold claims.

Videos have surfaced of the CEO scrutinizing any talks about market manipulation during an in-theatre event.

Yahoo Finance published a segment on AMC being on the threshold list highlighting the cause being due to naked short selling.

“Market Makers, like those at the New York Stock Exchange, Citadel is one, they can engage in naked short selling and it’s perfectly legal, it’s part of their market making duties to provide liquidity for a stock.”

The problem is naked short selling isn’t ‘legal’ and it takes advantage of a company’s stock price by driving shares down even when demand from retail buyers is high.

Naked short selling isn’t supposed to be illegal from a regulatory perspective and legal whenever Wall Street decides it to be.

Shares of AMC Entertainment fell -15% on Tuesday.

AMC stock went from being up more than +110% this year to now being up only +18%.

What Should Have Happened Instead?

The 13-Day Threshold Rule states that a broker-dealer with fail-to-deliver positions for 13 consecutive settlement days must immediately close out the ‘FTD’ position by purchasing shares in the open market.

AMC’s share price should have surged in a buy-back or ‘repurchase’ of shares in the lit exchange.

AMC FTDs spiked up to more than $36 million in FTDs last month, through the report is still in the process of updating via T+35.

Market News Today – AMC removed from threshold list.

FTDs, or Failure-to-deliver occurs when one party in a trading contract (whether it’s shares, futures, or options) fails to deliver on their obligations.

These failures derive due to buyers not having enough money to take delivery and pay for the transaction at settlement.

In the case of sellers, it means not having the goods to meet that transaction.

This is a direct result of naked short selling in a company stock, according to Yahoo Finance.

So far, there’s been zero positive impact on the price from AMC being removed from the threshold list.

The only thing shareholders can do now is wait for the approved proposals to go into effect after AMC’s lawsuit has concluded.

Leave your thoughts on what’s happening with AMC today

The company has been through a lot, and so have shareholders.

Shareholders are either more level-headed than they ever were before, or more fearful — and it’s quite easy to see on social media.

How is AMC Entertainment standing in your eyes?

Is this just another bump on the road like we’ve seen in the past with AMC stock?

Or does it seem a little more serious?

Leave your thoughts below and share this article to get your voice heard.

Market News Published Daily

Market News Today - AMC removed from threshold list.
Market News Today – AMC removed from threshold list.

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Regulators Strengthen Punishment for Naked Short Selling

Market News Today - Regulators Strengthen Punishment for Naked Short Selling.
Market News Today – Regulators Strengthen Punishment for Naked Short Selling.

(BK) The Securities and Futures Commission of the Financial Services Commission imposed a pecuniary penalty of 6.05 billion won (US$4.58 million) on two securities companies that committed naked short selling.

The Financial Investment Services and Capital Markets Act of South Korea was revised in April 2021 so that illegal short sellers will face pecuniary penalties instead of fines.

The two companies have become the first such case.

Today, naked short selling is illegal in South Korea, unlike covered short selling.

Investors in the United States have raised naked short selling concerns on social media, urging the Securities and Exchange Commission to model the practice of nations such as South Korea.

Previously, illegal short selling in the South Korean stock market was detected infrequently and violators could go almost unpunished.

This is because the maximum fine according to the act before the revision was 100 million won (US$75,694).

According to the amended act, the maximum pecuniary penalty is equal to the amount of illegal short selling.

In addition, violation may lead to at least one year in prison or a fine equivalent to 300 to 500 percent of the illegal profit or avoided loss.

This model is raising attention in the United States as the predatorial practice has dominated the industry for decades.

Naked Short Selling in America

Market News Today - Regulators Strengthen Punishment for Naked Short Selling.
Market News Today – Regulators Strengthen Punishment for Naked Short Selling.

Today, naked short selling in the American markets is given a blind eye.

Retail investors believe U.S. regulators to be complicit in the market injustices that occur on a daily basis.

(Singapore) Genius Group (NYSEAMERICAN:GNS) CEO Roger Hamilton has led CEOs to take legal action against naked short selling in the market.

He recently shared a petition on social media to end naked short selling in efforts to raise awareness of the illegal short selling strategy.

Naked shorting is the illegal practice of short selling shares that have not been affirmatively determined to exist, per Investopedia.

The predatorial practice allows short sellers to short a stock without there actually being any stock available to short.

In 2015, The SEC approved the use of naked short selling on IPOs although it was deemed an illegal practice in 2010.

Roger Hamilton says he noticed something was wrong in his company stock after shares would plummet despite his company having strong fundamentals and funding.

This is when he began to speak publicly about what was happening to his company.

Another public figure who has spoken out against naked short selling is Jon Stewart.

Regulators have always had the power to stop the manipulation happening in our stock market but have created rules that cater primarily to hedge funds.

“The Game is Rigged” Says Ex-Citadel Data Scientist

Patrick McConlogue, an ex-Citadel Data Scientist said during the ‘meme stock’ frenzy that the stock market is rigged, claiming he helped design it.

“The game is not fair and it never has been. Individual investors, even when operating in a swarm, are destined to lose. How do I know? I helped design the game.”

The dilemma here is that institutions are able to get away with the ‘capitalism’ card every time an issue is brought to their attention.

SEC Chairman Gensler has said that the SEC cannot completely interfere with the industry due to a company’s capitalistic rights in America.

Which makes sense through a capitalistic view, however, there should be tougher laws in certain sectors and industries, especially those that have the power to create massive economic downturns.

Regulators in other countries have strengthened the punishment for naked short selling for a reason — the manipulation creates systemic risk.

The question is, how many times will the U.S have to see the collapse of markets and our economy to understand this?

Other countries have recognized these fallacies in their market, maybe it’s time the U.S does the same.

Related: ‘We The Investors’ Challenges Wall Street on New SEC Proposals

Market News Published Daily

Market News Today - Regulators Strengthen Punishment for Naked Short Selling.
Market News Today – Regulators Strengthen Punishment for Naked Short Selling.

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Citadel Has a Long History of Market Manipulation

Citadel Market Manipulation
Market News: Citadel and friends are entering the crypto space | Ken Griffin.

Ken Griffin and friends are entering the crypto world very soon — investors are concerned as Citadel has a history of several violations and fines.

EDX Markets plans to bring ‘traditional finance’ to the crypto space, a not so ‘traditional’ space to begin with.

The exchange made up of Citadel, Sequoia, Paradigm, Virtu, Charles Schwab, and Fidelity is debuting in November.

EDX Markets will start trading a limited number of spot, crypto tokens starting with a November trial period, with the official launch in January, per Bloomberg.

Similar to trading equities and options, EDX will allow investors to buy and sell digital assets through their existing broker dealer, rather than an outside venue or directly through a crypto-native exchange. 

“We’re taking some of the best features of traditional finance and bringing it to the digital markets to make it more efficient, and bring that cost saving to investors,” Nazarali said.

Nazarali is the former global head of business development at Citadel Securities.

But as many are aware, these financial institutions have a long history of playing unfair.

Will these sharks taint the crypto space too?

Let’s look at Citadel’s market manipulation history as well as other Citadel violations and fines in the past.

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Citadel Market Manipulation

Citadel Fines and market manipulation.
Citadel violation and fines – market manipulation.

2015

In 2015, an account operated in China by the brokerage arm of US hedge fund Citadel was suspended.

It was the latest casualty of regulators’ hunt for market manipulators and short sellers at the time.

The China Securities Regulatory Commission said that the Shanghai and Shenzhen stock exchanges had suspended 24 accounts as part of a probe into high-frequency trading.

The investigation focused on a practice known as “spoofing” in which an investor submits a buy or sell order but then withdraws it before a sale is completed — a practice that can mislead investors by creating the false impression that a stock is trading at a particular price.

Citadel confirmed that one of its accounts managed by Guosen Futures was among those suspended.

2017

SEC Citadel

In 2017 Citadel was fined by the SEC $22.6 million to settle charges of misleading conduct.

The hedge fund misled customers about the way it priced trades.

The SEC found that between 2007 and 2010, Citadel used two algorithms to execute stock trades on customers’ behalf that gave investors a worse price for their trades, even when Citadel knew better prices existed elsewhere.

“This affected millions of retail orders,” said Stephanie Avakian, the acting director of enforcement at the SEC at the time.

Citadel neither admitted nor denied the findings.

2021

Citadel violations and fines.
Citadel violations and fines – market manipulation.

In 2021, Failure-to-Delivers (FTDs) rose dramatically in the period leading up to January 28th, 2021, a phenomenon consistent with increasing short interest by market makers such as Citadel Securities.

FTDs are indictive of naked short selling, which occurs when a short seller does not actually possess the security it is supposed to borrow.

This practice is largely inaccessible to individual investors but accessible to market makers.

At the time, Citadel, Robinhood, and others restricted retail investors from buying ‘meme stocks’ in order to prevent escalating institutional losses.

Citadel eventually lost billions after betting against AMC Entertainment in 2021.

But the entire system needs a refresh – The DTCC waived a total of $9.7 billion of collateral deposit requirements on January 28, 2021, saving brokers, and screwing up retail investors.

2022

The Chicago Tribune published a piece explaining exactly what retail investors have been warning the SEC about.

Citadel Securities’ dark pool dominates a big part of the financial world, accounting for as much as half of U.S. stock market activity.

The Chicago Tribune says this prominent dark pool is run by Chicago Billionaire Ken Griffin’s Citadel Securities and has been targeting small scale retail investors.

And they’re not wrong.

Dark pools are typically involved in payment for order flow (PFOF), where they pay broker firms to receive retail order flow.

Brokers such as Robinhood and TD Ameritrade accept payment for order flow.

But retail investors have been bringing these nefarious practices in the market to light.

Related: Biotech Company Suing Citadel Over Market Manipulation

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‘We The Investors’ Challenges Wall Street on New SEC Proposals

Market News Today - 'We The Investors' Challenges Wall Street on New SEC Proposals
Market News Today – ‘We The Investors’ Challenges Wall Street on New SEC Proposals

‘We The Investors’ is taking Wall Street head on which means retail investors from around the world are now being represented in a way like never before for the first time in history.

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.

Halts in AMC, GameStop, and other stocks during at the time angered many investors which led to the exposure of crime and market injustices on social media.

Retail investors have been pushing for market transparency ever since.

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, including Ken Griffin’s Citadel is pushing back.

Related: “The Game is Rigged” Says Ex-Citadel Data Scientist

Wall Street, Citadel, Face Organized Retail Investors

The New York Stock Exchange teamed up with retail broker Charles Schwab Corp and market maker Citadel Securities on Monday 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.

“We are deeply concerned that the Commission has simultaneously issued multiple far-reaching proposals that would dramatically overhaul current market structure without adequately assessing the cumulative impact on the market or the potential for unintended consequences,” the companies said in an SEC comment letter.

The SEC in December proposed requiring nearly all retail stock orders to be sent to auctions, as well as a new standard for brokers to show they get the best possible executions for their clients’ orders.

Market News Today – ‘We The Investors’ Challenges Wall Street on New SEC Proposals

The SEC also proposed lower trading increments and access fees on exchanges, and more robust retail order execution disclosures.

And now Citadel, Charles Schwab, and the New York Stock Exchange are fighting against these proposals that will help level the playing field for retail investors.

Payment for order flow has annihilated competition and reserved market maker Citadel Securities the right to buy retail orders from brokers such as Robinhood and TD Ameritrade.

During an interview with SEC Chairman Gary Gensler, the Chairman tells ‘We The Investors‘ that he believes the SEC should have the ‘Best Execution Rule‘, not the self-regulatory organization, FINRA.

Market News Published Daily

Market News Today - 'We The Investors' Challenges Wall Street on New SEC Proposals
Market News Today – ‘We The Investors’ Challenges Wall Street on New SEC Proposals

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“The Game is Rigged” Says Ex-Citadel Data Scientist

Ex-Citadel employee Patrick McConlogue says the market is rigged.
Market News Daily: Ex-Citadel employee Patrick McConlogue says the market is rigged.

Patrick McConlogue, an ex-Citadel Data Scientist said during the ‘meme stock’ frenzy that the stock market is rigged, claiming he helped design it.

“The game is not fair and it never has been. Individual investors, even when operating in a swarm, are destined to lose. How do I know? I helped design the game.”

Not many investors know this, but Patrick actually breaks down how Citadel and other hedge funds were able to make billions back in only weeks from halts.

In this article, I’m going to share his words and knowledge in the industry directly with you.

Share this article to raise awareness of the market injustices ‘experts’ have claimed were never true.

Your voice matters.

Let’s get started.

Ex-Citadel Employee Reveals Rigged Trading Game

Ex-Citadel employee Patrick McConlogue says the market is rigged.

Patrick McConlogue appeared on Fox Business during the ‘meme stock’ frenzy of 2021 when retail investors created one of the biggest scares in Wall Street history.

GameStop and AMC shareholders were able to create panic on Wall Street by heavily buying shares of the overleveraged shorted stocks.

As share prices soared, short sellers experienced massive losses.

GameStop was able to put Melvin Capital out of business, but Patrick McConlogue says other hedge funds were able to make back billions in losses during the halt.

The halts allowed hedge funds to enter AMC and GameStop knowing shares would plummet, allowing them to capitalize on the deflation of the price.

Patrick says the rules of the game also heavily favor hedge funds, something retail investors have urged SEC Chairman Gary Gensler for years to change.

“I respect many of my colleagues, the problem isn’t the people, it’s the rules of the game which heavily favor the funds.”

Below is ex-Citadel Data Scientist Patrick McConlogue’s story.

Related: Citadel, Charles Schwab Team Up to Destroy SEC Proposals

Patrick McConlogue Says the Stock Market is Rigged

Ex-Citadel employee Patrick McConlogue says the market is rigged.
Ex-Citadel employee Patrick McConlogue says the market is rigged.

“The game is not fair and it never has been. Individual investors, even when operating in a swarm, are destined to lose.

How do I know? I helped design the game.

A few years ago, I worked at the massive hedge fund Citadel. The multi-billion dollar fund was caught up in this week’s scandal for bailing out hedge fund Melvin Capital after everyday traders on Robinhood appeared close to liquidating the fund through mass buying of the GameStop stock $GME.

My role at Citadel was as an engineer in Long Term Quantitative Strategies. The entire department, filled with programmers and compliance officers, is dedicated to something called ‘alpha’ which determines the buying strategy of the fund.

I was responsible for innovative proprietary technology that capitalizes on public data faster than any other hedge fund. It’s a classic situation of machines against humans. I respect many of my colleagues, the problem isn’t the people, it’s the rules of the game which heavily favor the funds.

A group of traders on the r/WallStreetBets Reddit thread, now consisting of over 8.6M members, noticed that someone had overly “shorted” the GameStop $GME stock.

They decided it was the perfect time to buy. It was only around $18 per share and easily affordable for the common investor who kept buying, driving up the price of the stock.

As the buying frenzy continued the hedge funds who had taken the opposite position started to hemorrhage money.. BIG money.

The small investors celebrated their success online as news broke that the hedge fund Melvin Capital Management had lost so much on the $GME short position that they had to be bailed out by bigger hedge funds.

While the markets were closed Melvin Capital’s sinking battleship received an emergency infusion of $2.75 billion from Citadel and Point72.”

‘Meme Stock’ Halts

Ex-Citadel employee Patrick McConlogue says the market is rigged.

“On Thursday morning, Robinhood — the commission-free stock trading app used by small investors — suddenly shut down buys on $GME and a few other stocks that were under siege.

Only sell orders went through, reversing the trend, driving the stock prices back down and shoring up the hedge funds’ sinking ships. Remember, when the stock price goes down, the people who hold the “shorts” make money.

This started a chain reaction. Other retail trading platforms like E*Trade and TD AmeriTrade began freezing the stock for individual investors. But hedge funds own supercomputers.

They have direct access to stock markets. While small investors were frozen the hedge funds traded massive positions and quickly earned back the billions in losses from the past few days.

The rules of the game had been exposed, in broad daylight no less.

Robinhood users, when signing up for the popular trading app that offered “free trading” were likely unaware of their role in the hedge funds’ ability to reap huge profits.

The system is broken.”

Patrick McConlogue left Citadel for decentralized finance and co-founded a new technology called Overline that takes the philosophy of DeFi to the extreme.

Not only is Overline unable to freeze any of your assets but it can’t even turn off the exchange; it’s not possible.

You can read Patrick’s full write-up here.

Related: Ken Griffin Thanks Redditors for ‘Meme Stocks’

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Market News Today - Ex-Citadel data scientist says the market is rigged.
Market News Today – Ex-Citadel Data Scientist says the market is rigged.

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AMC Demands FINRA to Look at Skyrocketing FTDs

Market News Daily: AMC Demands FINRA and NYSE Look into Stock.
Market News Daily: AMC Demands FINRA and NYSE Look into Stock.

AMC Entertainment (NYSE:AMC) CEO announced that the company has contacted both FINRA and the NYSE to look closely at the trading of their stock.

“Many of you, and we, are aware that AMC Entertainment has been on ‘The Threshold List‘ for 3+ weeks, indicating a number of FTDs.

Some of you may be pleased to learn that we have contacted both FINRA and the NYSE asking that they both look closely at the trading of our stock.”

AMC failure-to-delivers (FTDs) have been begun to rise again.

FTDs topped 6.8 million in February (non-cumulative), amounting to more than $36 million in failed to close orders.

The data is still being reported which means there’s a possibility we may see higher FTDs once February’s entire month has been processed.

AMC Entertainment demands FINRA and NYSE to look into FTDs.
AMC Entertainment demands FINRA and NYSE to look into FTDs.

Now AMC’s CEO Adam Aron is demanding FINRA and the NYSE to look into the company’s alarming FTDs.

FTDs, or Failure-to-deliver occurs when one party in a trading contract (whether it’s shares, futures, or options) fails to deliver on their obligations.

These failures derive due to buyers not having enough money to take delivery and pay for the transaction at settlement.

In the case of sellers, it means not having the goods to meet that transaction.

Failure-to-delivers can occur in options trading or when selling short naked, per Investopedia.

According to Investopedia, AMC failure-to-delivers can also occur if there is a technical problem in the settlement process carried out by the respective parties (clearing houses).

Investors say there’s a major conflict of interest when Citadel Clearing LLC processes retail orders worldwide.

Adam Aron Demands FINRA and NYSE Look into AMC Stock

AMC Demands FINRA to Look at Skyrocketing FTDs
Market News Daily: AMC Demands FINRA to Look at Skyrocketing FTDs.

Ever since the Genius Group (GNS) CEO Roger Hamilton publicly began calling out short sellers and #NakedShorts, AMC shareholders have been hoping for Adam Aron to also join the fight.

While Adam Aron may be binded to what he can and cannot say, this is the closes we’ve see the CEO to join shareholders in an activist role.

The CEO has been criticized for not speaking out on market injustices, even after skyrocketing reports of FTDs in the company stock.

And although the CEO has said in the past he has never seen any signs of ‘synthetic shares’ floating around, today’s news requesting FINRA and the NYSE to look into the company stock is a massive win for activist investors.

There is no longer denial, now there is acceptance of an important part of market structure that must be thoroughly investigated by our regulators.

But I’m curious to know how you feel about this investigation.

Do you think this will lead Adam Aron to dive into the rabbit hole?

Do you applaud the CEO for taking this unexpected approach?

Leave your thoughts in the comment section down below.

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Market News Today - AMC Demands FINRA to Look at Skyrocketing FTDs
Market News Today – AMC Demands FINRA to Look at Skyrocketing FTDs.

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Citadel, Charles Schwab Team Up to Destroy SEC Proposals

Citadel, Charles Schwab Team Up to Fight SEC Proposals
Market News Daily: Wall Street Pushes Back Against SEC Stock Market Reforms 2023.

(Reuters) The New York Stock Exchange teamed up with retail broker Charles Schwab Corp and market maker Citadel Securities on Monday 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.

“We are deeply concerned that the Commission has simultaneously issued multiple far-reaching proposals that would dramatically overhaul current market structure without adequately assessing the cumulative impact on the market or the potential for unintended consequences,” the companies said in an SEC comment letter.

The SEC in December proposed requiring nearly all retail stock orders to be sent to auctions, as well as a new standard for brokers to show they get the best possible executions for their clients’ orders.

The SEC also proposed lower trading increments and access fees on exchanges, and more robust retail order execution disclosures.

And now Citadel, Charles Schwab, and the New York Stock Exchange are fighting against these proposals that will help level the playing field for retail investors.

Payment for order flow has annihilated competition and reserved market maker Citadel Securities the right to buy retail orders from brokers such as Robinhood and TD Ameritrade.

During an interview with SEC Chairman Gary Gensler, the Chairman tells ‘We The Investors‘ that he believes the SEC should have the ‘Best Execution Rule‘, not the self-regulatory organization, FINRA.

Citadel Said in 2004 PFOF Should Be Banned

New York Stock Exchange News | Citadel SEC News Today.
New York Stock Exchange News | Citadel SEC News Today.

Citadel pushed back on the possibility of a payment for order flow (PFOF) ban in June of 2022.

But Citadel said in 2004 that payment for order flow creates conflicts of interest and should be banned, according to an SEC file.

Gary Gensler said there may be a conflict of interest for brokers and that too much power is concentrated in a handful of market makers.

The SEC Chairman plans to reroute retail investors into an automated system that would provide a deep pool of liquidity.

The aim of the proposed rules is to improve market quality and efficiency, by boosting competition for retail stock orders and reducing unnecessary intermediation, SEC Chair Gary Gensler has said.

However, the NYSE, along with Schwab and Citadel Securities, asked the SEC to indefinitely withdraw the auction and best execution proposals, saying they could lead to less market liquidity and create confusing regulatory overlap.

“We believe that this more targeted approach will result in significant benefits for U.S. equity market participants, while meaningfully reducing the risk of negative outcomes for markets and investors, including the risk of firms retreating from being liquidity providers – which would be particularly detrimental to retail investors,” they said.

Related: Global Head of Operations at Citadel Has a Board Seat at DTCC

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Market News Today - Citadel News Today.
Market News Today – Wall Street Pushes Back Against SEC Stock Market Reforms | Citadel against SEC Proposals 2023.

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The SEC Green-Lighted Naked Shorting of IPOs in 2015

SEC Naked Shorting
Market News Today: The SEC green-lighted naked shorting in 2015.

Forbes published a piece surrounding Uber’s ‘troubled’ IPO stating that the SEC green-lighted naked shorting of IPOs in 2015.

“A curious thing happened during Uber’s troubled initial public offering last week: naked short selling of UBER shares by the banks involved in placing Uber’s IPO, according to several sources who confirmed this to CNBC.

Normally, naked short selling is illegal.

But it was legal in this case, and it gave the banks a chance to profit–as investors lost money–when the IPO traded down 18% in its first two days.

Naked-shorting of IPOs by banks, which the SEC green-lighted as recently as 2015, has changed IPO market dynamics by altering the relative power between banks, issuers and investors. 

To the detriment of investors, banks now have less fear of incurring major losses from pricing an IPO too high because banks now have a tool (naked shorting) to protect their downside risk.”

Forbes said that thanks to the SEC’s explicit statement allowing naked shorting during IPOs, banks have a chance to win regardless of what the IPO is priced at, a fear they had prior to getting the green light on naked shorting.

In a space call with Genius Group ($GNS) CEO Roger Hamilton, a user had stepped up to question the proof of naked shorting discussed about in sort of media or case.

As you can imagine, speakers on the panel were quick to give the user the information they lacked to research in the first place.

But it’s there, and this is just one case on the proof of naked shorting in the market.

GNS Shares Plummet After IPO

2023 GNS #NakedShortsWar.
2023 GNS #NakedShortsWar.

Genius Group CEO Roger Hamilton said he suspected naked shorting was happening in his company stock after shares had gradually plunged after their IPO date.

Roger Hamilton has been leading the fight against naked shorts by not only raising awareness on social media but also by taking legal action.

The company just launched phase 2 of their legal battle against naked short selling.

One of the topics discussed in the space call with Roger was of dual listing using the blockchain.

My thoughts on the blockchain are that it provided accountability and less stress on investors when dealing with manipulative shorting tactics.

It’s still a very new innovation, especially when discussing a tradable blockchain exchange.

A great effort to fight naked shorting nonetheless.

“Naked shorting is impossible to do when securities are issued natively on a blockchain. Had Uber’s shares been issued on a blockchain rather than through legacy systems, banks simply would not have been able to issue more UBER shares than the quantity of shares outstanding. The price-suppressive impact of the naked shorting–however large or small it was in the Uber case–simply could not have happened,” said Forbes.

Related: Citadel Said in 2004 Payment for Order Flow Creates Conflicts and Should Be Banned

A History on Naked Short Selling

What is naked shorting?

Naked short selling, or naked shorting, is the practice of short-selling a tradable asset of any kind without first borrowing the asset from someone else or ensuring that it can be borrowed.

Naked shorting was enabled legally by UCC Article 8 in 1994, owing to a combination of two features: (1) indirect ownership of publicly-traded securities and (2) a special exemption that obviates the normal requirement that the seller prove in advance that it actually owns the property it is selling to a buyer.

“What we actually own is an IOU from our broker-dealer–a contractual right to the shares instead of the real thing. Your broker, in certain circumstances, has the right to conjure and sell you IOUs to more shares than actually exist,” says Forbes.

The US legal system made a policy decision to favor liquidity over solvency–to favor negotiability of securities over keeping accurate and timely records of who really owns what.

Patrick Byrne brought naked shorting to the attention of regulators but was ridiculed and eventually paid off with a winning settlement to lay low.

After the events of the ‘meme stock’ frenzy in 2021, retail investors came together and scrutinized the SEC, DTCC, and FINRA for allowing blatant market manipulation to occur.

Retail investors were momentarily prohibited from trading shares of AMC and GameStop due to liquidity concerns within several market makers and brokers including Citadel and Robinhood.

The DTCC waived billions of dollars in collateral to reset the game for the big players, cheating retail investors out of their money.

“The problem is that “overissue” of securities suppresses market prices. This is one of many subtle ways that value is skimmed from Mom and Pop investors in securities markets.” – Forbes.

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Market News Today: The SEC green-lighted naked shorting in 2015.
Market News Today: The SEC green-lighted naked shorting in 2015.

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