Re:Statement of SEC Regarding Recent Market Volatility
by stonecraftwolf on Friday January 29, 2021 @10:33AM
(#25958258)
IANAL, but to me it seems like it would be very difficult to convict retail investors of investing in a stock they believe has value and then telling other people they invested in a stock they believe has value. Unless there are chat records of a few redditors coordinating an astroturf campaign while twirling their mustaches or whatever, I don’t see how this could be aimed at retail.
Regulated entities who have access to tools or information not available to retail investors, or who applied financial pressure to manipulate access to the markets, or did not disclose conflicts of interest...that seems like a much easier case to make.
Re:Statement of SEC Regarding Recent Market Volatility
by vorpalhex on Friday January 29, 2021 @10:34AM
(#25958272)
It's also not as if hedge funds are employing thousands of welders or craftsmen. These are high risk financial strategies by people who qualify as professional traders - "I didn't know" isn't an excuse anymore. If they lose the game, they get to eat their losses.
We will probably see a few retail traders get burned, and I suspect anyone wanting to do trading in the future is going to have to fill out more disclaimers.
Re:Statement of SEC Regarding Recent Market Volatility
by jeffbee on Friday January 29, 2021 @11:21AM
(#25958938)
Maybe not hedge funds but I estimate that the majority of what laypeople call "hedge funds" are not hedge funds. There are tons of firms that just run money for ordinary people. At my old firm they have shorted blackberry in thousands of individual margin accounts, and those accounts are losing money on paper and might have to realize losses in order to rebalance their risk.
Re:Statement of SEC Regarding Recent Market Volatility
by vorpalhex on Friday January 29, 2021 @11:31AM
(#25959081)
I'd have some questions if my low risk or medium risk investment firm was making large shorts. Shorts are very risky for a whole bunch of reasons - which is also why they can be high value. Don't get me wrong, I'm sure every high risk fund can find at least one pensioner invested in them, but if your firm is well known for shorting then you can't pretend to be anything but high risk/high reward.
Re:Statement of SEC Regarding Recent Market Volatility
by jeffbee on Friday January 29, 2021 @11:45AM
(#25959284)
These aren’t large positions and that is the point. If a short position that was 2% of your account suddenly becomes 10% of it, now you have a problem, and the problem wasn’t caused by a wrong investment thesis, it was caused by a mob of kids online.
It's clear that everyone should be lawyering up depending on what positions they had when they started pumping this idea to the masses. That said, I'm a big believer in "a fool and his money". If there are hedge funds or retail investors out there who, perhaps, didn't understand all the risks of what they were doing, protecting them from their folly only causes more problems in the future.
As horrible as this sounds, now is the time to let everyone fail. Hard. If we don't, no lessons will be learned.