Tag: Stock Market Manipulation (Page 1 of 15)

Why Did FINRA Halt the Trading of MMTLP?

Why Did FINRA halt trading of Meta Materials?
Market News: Why Did FINRA halt MMTLP?

FINRA halted $MMTLP in December without notice leaving investors confused and angry.

The regulator blatantly proved to be one of the biggest obstructions in the market when it also failed to deliver investors with Meta Materials’ planned distribution of its preferred stock.

Now shareholders are demanding FINRA release a statement regarding the events that occurred with MMTLP.

The last day to purchase shares (and be eligible for their dividend) was Dec. 8, 2022.

Meta Material’s final trading day was Dec. 12, 2022.

The distribution date of the private Next Bridge Hydrocarbon shares was Dec. 14, 2022.

Shareholders never received the proposed preferred shares.

So, why did FINRA halt the trading of Meta Materials / MMTLP and delist the security leaving several investors questioning the integrity of our regulators?

Here’s what the regulator said.

FINRA Comments on MMTLP Halts

Meta Materials
Why did FINRA halt Meta Materials?

“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.”

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 I don’t think they were referring to retail investors at all, but rather FINRA’s private investors and partners.

Tinfoil hat on, you tell me.

Related: The Retail Community Says FINRA is Corrupt

Who is FINRA?

Why did FINRA halt MMTLP? Why did FINRA halt Meta Materials?
Why did FINRA halt MMTLP? Why did FINRA halt Meta Materials?

FINRA stands for the Financial Industry Regulatory Authority and is a self-regulatory government organization that oversees U.S. broker-dealers.

The organization contains records of every trade made available intraday, including that of naked short sales.

FINRA requires firms to be able to meet their short sale requirements as well as have a process to close out fails to deliver within their required timeframes.

However, they’re the open window that allows these manipulative strategies to occur in the market.

FTDS (fails-to-deliver) are mounting up every month according to SEC data, and FINRA is unable to get firms to close out these obligations.

The retail community is calling it foul play, alleging the possibility of lobbying within the self-regulated organization.

FINRA’s mission statement:

At FINRA, our mission is clear—to protect investors and promote market integrity. At FINRA, our mission is clear—to protect investors and promote market integrity. Each year, we conduct thousands of investigations of potential violations of securities industry rules, regulations and U.S. securities laws.

So, who’s watching FINRA?

Justice for the MMTLP community must be served.

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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

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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.


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.


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.


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.


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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