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.
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.
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.
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 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
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 – 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.
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.
Gary Gensler says 90%-95% of retail orders don’t go through lit exchange.
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
Gary Gensler confirms 90%-95% or retail orders are processed in dark pools
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?
Will PFOF get banned in the United States?
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.
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.
#MarketMakersDontHaveConsent
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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Market News Today – Can the SEC suspend dark pools?
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In this article, we’re going to go over some of the latest developments in AMC, it’s history since redditors took over, and an AMC short squeeze update for the year of 2023.
AMC keeps on keeping on, and although AMC has been on discount recently, retail investors continue to buy and hold it.
Retail investors remain excited about the data that has been collected for years now.
Will we see an AMC short squeeze while we continue to ride today’s bear market?
And if so, how soon?
Welcome to Franknez.com – the blog providing you with content on stocks, crypto, and market news. Today we’re discussing AMC Entertainment stock and its short squeeze update and history.
Lets get started!
How soon will we see an AMC short squeeze?
Retail investors all want to know.
Is it this week?
Will it be next week?
Or, are we looking at a longer game here?
Here’s what we know.
Key Highlights
AMC closed at $5.46 on March 13th. The stock continues to be heavily shorted. AMC Entertainment is set up for a short squeeze despite its split.
Shareholders continue to buy and hold the stock.
AMC’s short interest data shows us the stock has the perfect setup for a short squeeze.
Below is a series of documented facts and positive news that all influence AMC’s potential towards a short squeeze.
“Since reopening our first theatres with AMC Safe & Clean in August, AMC has welcomed back nearly 10 million moviegoers nationwide without a single reported case of COVID-19 transmission among moviegoers at our theatres. We look forward to welcoming back our New York City guests to the big seats, big sounds and big screens that are only possible at a movie theatre.”
Adam aron, President and CEO of AMC Entertainment
For those who thought AMC was a dead company, think again.
The company is now generating big revenue since it’s reopening and has beat every quarter since 2021.
Positive News for AMC Entertainment (Archive 2021)
Adam Aron gives positive news on AMC Entertainment – Archive 2021
AMC Entertainment has raised more than 2.2 billion dollars in cash
90% of AMC theaters in the United States are now open with New York and Los Angeles finally reopening
Vaccinations and policies are making movie theaters safe
New movie titles are guaranteed to increase sales revenues
CEO and President Adam Aron expresses an optimistic future for AMC Entertainment
AMC Entertainment has implemented a Safe & Clean program under the advisement from Harvard University’s prestigious School of Public health as well as well as the No. 1 U.S. cleaning brand, The Clorox Company. This means movie goers can now return at ease knowing a proper sanitation program has been put in place.
Hedge fund affiliate partners such as MarketWatch, The Fool, and other finance website have been trying to redirect the public from investing in this stock.
That’s primarily because hedge funds are losing millions by the day.
A short squeeze could even put them out of business.
This is why it’s important and always has been for me to spread any positive news surrounding AMC.
I don’t believe in the manipulation of the media and I will continue to update these articles as more great news unfolds.
Experts, analysts, and shareholders can’t identify an exact date and time.
However, the possibility of an AMC short squeeze is certainly possible given that it is still a very heavily shorted stock.
We also now have more data then ever before that indicate a massive short squeeze is almost certain to happen.
Especially now that the SEC has announced some crackdown on shorting.
With Melvin Capital and other hedge funds out of the picture, it’s only a matter of time before others close their positions.
It’s tendie time!
Analyst AMC predictions 2021
With that being said, Trey’s Trades predicted a short squeeze in 2021. Trey has been a leader in the AMC community, though he’s recently taken time off from stock content on YouTube.
Data points towards AMC stock reaching $1000+ per share.
See what Trey had to say.
AMC short squeeze – AMC Stock Forecast – AMC Stocktwits
The real question is, how can retail investors make this AMC short squeeze happen?
We know that short-sellers eventually have to close their positions. This means that they will eventually have to buy AMC stock at the current share price.
If retail investors continue to drive the share price up by buying the dip and holding their positions, short-sellers will have no other option than to buy from the retail investor at a higher share price.
2. Retail investors will also need to buy the climbs in order to show a demand for the stock. This doesn’t have to be huge buys, rather incremental to validate the current share price.
This play essentially creates a supply and demand scenario between retail investors and short-sellers.
The results? A short squeeze.
Just make sure to take your profits.
The last thing you want is to see your gains turn into losses.
Hedge funds are doing everything they can to prevent a short squeeze
How are they doing this?
By promoting false information online (we’re certain you’ve seen it)
Through strategies such as short-ladder attacks in the market
And, by restricting certain brokerage accounts from allowing its retail investors to purchase or buy shorted stocks (Robing hood)
This is what retail investors can do to fight corruption:
Share content that presents facts (blog posts, analysis videos, etc.)
Continue to educate yourself and make investment decisions based on your personal analysis
We’ll begin to see a trend similar to that of GME (Gamestop). AMC will enter a bullish territory before hitting an ‘abnormal’ peak in which AMC would have ‘squoze’.
If an AMC short squeeze doesn’t occur, AMC stock price will still go up allowing shareholders to make at least some sort of profit.
That is, for those whose majority of shares were purchased at today’s current lows.
With AMC theaters now open, it’s inevitable that the company will begin to see bigger sales revenue every time a new title is released.
Keep in mind that AMC’s share price during the booming party economy of 16′ was roughly around $30 per share.
If a short squeeze doesn’t happen, fundamentals will continue to bring the stock up as more investors are buying the stock.
However, a short squeeze not happening is very unlikely as AMC is currently still one of the most heavily shorted stock in the market and most held stock, beating both Apple (AAPL) and Tesla (TSLA), via. NASDAQ.
Majority of the float is also held by retail investors, so the company has a huge support.
AMC hasn’t squeezed yet primarily to two main reasons.
The stock requires volume to drive the stock price action up
Shorts need to close their positions
Volume will surge as more and more retail investors (as well as institutions) get in on AMC stock.
Regarding shorts closing, retail investors need to squeeze them out of their positions by holding their positions and helping increase AMC’s short borrow fee.
You can keep tabs on AMC’s short borrow fee as it changes every day via. Ortex, or Fintel.
In 2021, Wanda Group had caused a little bit of disruption for retail investors by profiting on the first sight of gains.
This turmoil was only short-term but is a reason why we’ve seen some selloff in the market a few weeks ago.
However, Adam Aron has brought awareness in an interview with Trey’s Trades that this selloff from Wanda is simply policy from China.
Despite going around the breaking partnership, Wanda cashed out completely two years ago, making retail investors the biggest stakeholder in the company.
Is AMC Ever Going to Squeeze?
All the numbers point towards the right direction for a massive short squeeze.
Shorts and hedge funds continue to lose money every day.
Interactive Brokers Chief Strategist Steve Sosnick says there’s big demand to short AMC Entertainment (NYSE:AMC) stock.
He says the biggest reason aside from the company’s fundamentals is its new merge with its equity (NYSE:APE).
“It’s very hard to keep the momentum in these things because economic reality does take hold.
Bed Bath & Beyond, at one point was the best performing stock on the board until reality set in and they began defaulting, averted bankruptcy, but using a deal that is so dilutive that it’s unavoidable.”
Sosnick says AMC is in a very special situation because of the proposal to merge APE with AMC common shares.
“Right now we’re seeing such a demand to short AMC partly because of its difficulties but partly because of the special situation.
This really is what they were looking for in some ways as the mother of all short squeezes.
The borrow rate, it costs you 700% to borrow the shares overnight — if you can find them,” said the Interactive Brokers Chief Strategist on Yahoo Finance.
Is AMC Entertainment stock about to squeeze this year?
“Redditors, thank you so much for helping create the best pipeline we’ve ever had”, said Ken Griffin on Business Insider.
Ken Griffin, on how the GameStop frenzy helped raise Citadel’s profile with potential hires.
Business Insider says the SEC found no truth to any of the conspiracy theories but how can the SEC really go against one of the most powerful hedge funds in the world?
Transcripts showed Citadel and Robinhood did in fact have “blunt negotiations” the night prior to the halts.
A Miami district court judge admitted the Citadel and Robinhood transcripts were suspicious.
However, the federal court has dismissed the case due to a ‘lack of evidence’.
Let us know in the comments section below what an AMC short squeeze would mean for you!
If you’re an AMC shareholder let us know in the comment section below.
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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.
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
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.
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.
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.
“We are going to see the mother load of shares that don’t exist.. it’s going to pale $AMC & $GME “ 🚨
FINRA halted the trading of $MMTLP and this ticker may expose the Corruption on Wall Street with Naked Shorts. FINRA currently has multiple Lawsuits against them atm💥 rt pic.twitter.com/fMEPfSTcly
More than two months later and shareholders have not received the proposed preferred shares.
The company’s preferred shares that traded under MMTLP have been deleted as part of the highly anticipated Next Bridge Hydrocarbons spinoff.
Before that, on Dec. 9, the Financial Industry Regulatory Authority (FINRA) halted trading ahead of the final day on the market for MMTLP stock.
Next Bridge Hydrocarbons is not a publicly traded company, despite being spun off from one.
Investors who held MMTLP stock on Dec. 13 were expecting to receive shares of the private company.
Next Bridge Hydrocarbons on MMTLP Halt
Market News: Next Bridge Hydrocarbons stock news and updates.
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.”
In regard to what happened to shares of Next Bridge, the company said the following:
“AST has distributed all shares of our common stock related to the Spin-Off –either directly to any stockholders that held their shares directly registered with AST or to our shareholders’ bank, broker or nominee representatives.”
About Next Bridge Hydrocarbons
The Company is an independent public reporting energy company engaged in the acquisition, exploration, exploitation and/or development of oil and natural gas properties in the United States. Our primary focus has been the development of interests in an oil and gas project consisting of 134,000 contiguous gross acres we hold in the Orogrande Basin in West Texas in Hudspeth County, Texas. In addition, we have minor interests in the Eastern edge of the Midland Basin in Texas, and two minor well interests in Oklahoma. Please visit www.nextbridgehydrocarbons.comfor more information.
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Market News Today – Next Bridge Hydrocarbons stock update.
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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.
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.
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.
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: How hedge funds manipulate the stock market.
Hedge funds have been manipulating the stock market for decades.
But it wasn’t until now that a community has risen to raise awareness of market injustices.
The shorting of both AMC and GameStop stock have uncovered a number of nefarious strategies used against retail investors.
What is the SEC doing to regulate these financial entities?
We’re here to find out.
Welcome to Franknez.com – The blog that fights for retail investors. Today we’re discussing how hedge funds manipulate the stock market and what the SEC is doing about it.
Let’s get started!
Overleveraging Borrowed Shares
Hedge funds have an incredible supply of short shares available to borrow.
This advantage has allowed them to manipulate a stock’s share price by initiating short-ladder attacks.
While supply and demand are pushing a stock’s price up, hedge funds short the stock using an insane amount of leverage.
This predatorial strategy has yet to be announced as illegal nor has it been addressed by the SEC.
Off Exchange Trading
Hedge funds and market makers are getting away with being able to trade and swap stock in foreign exchanges where the stock’s price isn’t required to be disclosed.
They’re taking retail orders and, in a way, manipulating the circulating supply by not reporting accurate transactions.
We’ve seen this happen with Barclays.
Barclays CEO, Jes Staley – Hedge fund manipulation
Reports by Finra have been made public detailing multiple fines on Barclays for inaccurate books and records.
Barclays is one of Citadel’s clearing houses.
Off exchange trading where transactions aren’t displayed on the list market such as the NYSE is a massive problem the SEC is still trying to figure out.
AMC and GameStop have had an incredible amount of FTDs, or failure-to-delivers.
These are orders that have not been executed in options, and are usually a result of a ‘short party’ not owning or not having all of the underlying asset.
This has led retail investors to the educated assessment that synthetic shares are floating in the market; shares known as naked shares used to short a stock.
According to Investopedia, “Despite being made illegal after the 2008–09 financial crisis, naked shorting continues to happen because of loopholes in rules and discrepancies between paper and electronic trading systems.”
Naked shorting has gone mainstream with CNBC’s Melissa Lee and Fox Business’s Charles Payne bringing light to this predatorial practice in the market.
Retail investors must use their voice to address these issues to the SEC.
According to The Fool, you should invest in this or that “instead”.
We’ve seen the headlines countless times.
The Motley Fool is a source that provides its subscribers with hand-picked stocks with potential gains.
With tremendous respect, stick to what you do.
The integrity of this company is to help investors pick winning stocks, not to divert them from a stock due to its potential upside that can cause hedge fund partners to lose billions of dollars.
And that’s exactly what happened.
No matter how many times mainstream media outlets tried to divert retail investors from buying AMC stock, it cost hedge funds a lot of money all year.
And at the same time, a lot of retail investors have a lot of unrealized gains.
This ladies and gentlemen is how the media has tried to manipulate the performance of a stock.
This influence can sway a new retail investor from adding to the surging volume of shares being purchased in the market.
To the new retail investor – make your financial decisions based on your own due diligence.
Not on what media sources get paid to write about.
Yahoo Finance & InvestorPlace
Platforms such as Yahoo Finance & InvestorPlace have also had their fair share of negative headlines to try and divert the public from skyrocketing AMC to the moon.
With InvestorPlace even throwing a jab at GME investors saying, “If You’ve Made Money On GameStop, You’re Not An Investing Genius”.
Perhaps not, but I’m pretty certain these investors are wealthier than the person who came up with that punchline.
These media sources have been discouraging new retail investors from investing in AMC since the beginning of the year although the stock is up year-to-date!
Manipulation In the Stock Market
Robing Hood? Stock market manipulation
I’m sure you’ve all heard of the Robinhood scandal.
This is another form of manipulation in the stock market caused by the halt of buying power.
Robinhood prevented its users from buying stocks such as AMC and GME (GameStop) during GME’s bull run.
Although restrictions aren’t as tight anymore, we’re beginning to see trusted and beloved companies get exposed as hedge funds worst nightmares become a reality.
Today we’re seeing more people learn about how the stock market moves.
If more of the public is to understand how hedge funds pose a risk to our economy and businesses, we must expose these financial institutions for who they really are.
Franknez.com fights The Fool, Yahoo Finance, and InvestorPlace
Franknez.com is fighting for the community against malpractice from all news media shunning AMC, GameStop, and other retail favorites.
This platform will serve as a positive media outlet for the community and only spread factual documentation, and news related cited-sources.
I will not encourage retail investors to take a position in any stock.
However, I will outline the facts and evidence to help you make your own personal financial decision.
How can retail investors bring awareness to the community?
Retail investors can expose false information on social media to shine light on manipulation tactics driven by hedge fund partners.
Sharing factual and positive articles relating to the performance or analytics of a particular stock is another way the investing community can stay united.
Franknez.com is a platform for the community.
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Market News: Conflicts of interest arise – #CitadelScandal
David Inggs is Global Head of Operations at Citadel and is responsible for all products across asset servicing, billing, cash management, clearing, and has a board seat at the DTCC.
The conflict of interest has raised big concerns amongst the retail investor community online as Citadel has been a leading and one of the biggest short sellers in the stock market.
On January 28th, 2021, The DTCC waived $9.7 billion of collateral deposit, limiting institutional losses and limiting retail profits during the ‘meme stock’ frenzy.
The organization allowed several naked shares to flood the market prior to the massive jump in share prices only to help financial institutions in the end.
Citadel and Melvin Capital who shut down last year, lost billions during the event.
Melvin was crippled throughout 2022 from its severe losses in GameStop the year prior.
Had the DTCC not stepped in, the hedge fund would have closed that same year.
“Anyone shorting AMC or GameStop is out of their mind. Wallstreetbets is too powerful, and trying to bet against them right now is just giving them more ammo”, said Jim Cramer.
Since the halt of ‘meme stocks’, the retail community has been uncovering a variety of conflicts of interest too big to ignore.
Who is David Inggs?
David Inggs is Global Head of Operations at Citadel and is responsible for all products across asset servicing, billing, cash management, clearing, Collateral Management, Reconciliation & Control and Settlements and is on the Board of Directors at the DTCC.
Prior to joining Citadel, David served as Chief Operations Officer of E*TRADE where he led operations globally across Trade Execution, Global Clearing, Middle Office and Shared Services, among other functions.
David spent most of his career at Goldman Sachs, where he was a Managing Director and held numerous leadership positions over the course of a decade, including Global Head of Clearing Operations and Head of Credit Default Swaps and Equity Derivative Operations.
David also worked at Morgan Stanley, where he served as an Executive Director and Head of Global Bank Loans, in addition to work in credit derivatives and collateral management.
The Global Head of Operations at Citadel has worked for every major criminal financial institution that has been too big to face serious consequences from fraud or market manipulation in the past.
Retail investors say this is market injustice and regulators are part of the problem.
Who is the DTCC?
The DTCC (Depositary Trust and Clearing Corporation) is an American post-trade financial services company providing clearing and settlement services to the financial markets.
The DTCC processes trillions of dollars of securities on a daily basis.
As the centralized clearinghouse for various exchanges and equity platforms, the DTCC settles transactions between buyers and sellers of securities.
The information is recorded by its subsidiary, the NSCC.
After the NSCC has processed and recorded a trade, they provide a report to the brokers and financial professionals involved.
This report includes their net securities positions after the trade and the money that is due to be settled between the two parties.
Clearing corporations such as the DTCC may receive cash from a buyer and securities or futures contracts from a seller.
The clearing corporation then manages the exchange and collects a fee for this service.
The size of the fee is dependent on the size of the transaction, the level of service required, and the type of security being traded.
Investors who make several transactions in a day can generate significant fees.
This means every naked share that has been created on the ‘short side’ has been recorded and bypassed by the DTCC/NSCC, all for a fee.
A press released was published advising of the circumstances that occurred during the time ‘meme stocks’ were halted.
The DTCC waived $9.7 billion of collateral deposit requirement on January 28th, 2021, limiting institutional losses and limiting retail profits.
While AMC Entertainment stock was able to surge months after the January event, GameStop shareholders were strongly affected by the halts.
Retail investors say they feel cheated from regulators who failed to let the short squeeze play out in their favor.
Conflicts of interest such as David Inggs’ involvement with Citadel and the DTCC could be seen as a detriment to market integrity.
In an interview with ‘We The Investors’, SEC Chairman Gary Gensler said one proposal they’re looking at this year involves tackling conflicts of interest in the financial markets.
Citadel processes more than 40% of retail’s orders through PFOF (payment for order flow), and with a bias towards short selling, gives the hedge fund an incredible advantage over the common investor.
Should the involvement between both Citadel and the DTCC be considered a crime?
Or is this just a coincidence?
Leave your thoughts below.
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Franknez.com is the media blog that keeps retail investors informed.
So where is TD Ameritrade pulling up this information from?
They actually have a response to that.
Welcome to Franknez.com – the ape community has mentioned from time to time that a lot of the data provided by financial institutions is skewed. Here’s an example that happening right now.
“Our news and research is provided by Third Party Vendors”
So, why is this short interest data important?
Retail investors rely on the short interest data to determine how much of a company’s float is being shorted.
The short interest that Ortex is reporting is significantly less than that of TD Ameritrade’s.
TD Ameritrade’s short interest data is more than double that of Ortex.
Short interest data also enables us to see how much ‘squeeze potential‘ there is in a heavily shorted stock.
At least to a certain degree.
So if we have sources reporting masked or hidden short interest data, it’s deceit in many accounts.
Or is this simply a glitch from TD Ameritrade?
TD Ameritrade AMC Short Interest Tweet
The ape community is questioning why ticker symbol AMC is the only stock that has had a significant number of glitches throughout the year.
Or are the real numbers being masked to divert the public from jumping in on this short squeeze play.
The data comes from MorningStar but both TD Ameritrade and ETrade experienced this anomaly in their system.
TD Ameritrade AMC Short Interest 40.25
According to TD Ameritrade, this was a glitch in their system.
However, the data would have not been changed unless the retail community pointed it out.
Was this a mistake on their end that retail was not supposed to see?
Or was this legit one of several glitches that has been occurring specifically for AMC Entertainment stock?
I’d love to know your thoughts in the comment section below.
Thank you for asking. We've checked and found the data to not be correct. Our technology team is working to correct the information. We have no ETA but hope to have correct data restored soon. Thank you for your patience. ^ZJ
The broker is stating their technology team is working to correct the information but have no ETA as to when the correct data will be restored.
Why so many glitches with AMC stock?
AMC Entertainment has been experiencing several glitches throughout 2021.
They have varied from skewed data such as the short interest, to chart patterns, and even share price.
The ape community has concluded over the months that AMC’s short interest data is significantly higher than what is being displayed.
Lou from the YouTube channel has even concluded that AMC’s share price is being masked and could be in the hundreds to even thousands of dollars per share.
Now, while these are rather extreme claims, it’s not difficult to understand why such claims have been made.
AMC is one of the most overleveraged stocks from hedge funds shorting it.
Millions upon millions of shares have been borrowed to short it all year.
As more hedge funds close, and others continue to bleed their customers, retail investors suspect they will do everything in their power to deceive retail from squeezing them from their short positions.
An interesting narrative, but a very likely one just as much.
What other glitches have you seen in AMC stock?
Out of the several glitches that have occurred, what other glitches do you recall seeing in AMC Entertainment stock?
Leave your thoughts below.