I don’t think so... if WSB is being criticised for market manipulation, then so should be hedge fund managers. Everyday we see institutional investors setting new price targets for certain stocks—which definitely drives up the price. People are just criticising WSB since newbie investors backed dumb stocks.

This seems to be the sentiment of a lot of people, but the SEC has in fact prosecuted hedge fund managers for just this tactic in the past. It is generally hard to prosecute because smart hedge fund managers don't leave a paper trail and leave a trail of plausible deniability.

But in this case, people are literally admitting "Yes, I would like to engage in your proposed felony." Even manipulation aside... conspiracy itself is a crime. I don't think conspiracies suddenly become legal just because they were very large.

The key distinction AFAICT is that r/WSB isn't commanding people to buy, nor does it have any assets of its own. This is just a stochastic result of mania and individual investors doing what they believe to be in their best interest.

A conspiracy doesn't require one organiser to command the others, any willing participant is just as guilty. Which is why it is hard to prosecute, you need to prove intent. And it seems that it is exactly what those guys documented on reddit.

> r/WSB isn't commanding people to buy

ehhhhhh... I've seen plenty of BUY BUY BUY posts. Unless I'm missing your point. I understand what WSB isn't a corporation or entity in and of itself, but it is still a (somewhat) organised group of uh... "investors".

Cramer says buy buy buy almost every day on his show during lighting round. Is that manipulation too?

But aren’t there plenty of “BUY BUY BUY” posts that result in nothing? My understanding prior to this was that r/WSB was typically a lot of hot air being blown around trying to drum up enthusiasm. No different than your uncle saying at the table “I’ve invested in... and it’s going sky high!”

The bar to qualify this random association of people as organized seems pretty high.

Yeah absolutely, this is one of the few shots that landed, but it was still a very obvious shot.

I qualified "organised" with "somewhat", because nothing in this kind of place is ever really organised, but I mean just look at what they've done. You couldn't do this with a fully disorganised group.

True... except they don’t call themselves investors. They relish using terms like autists, degenerates. Basically they enjoy sending across a message more than making a fortune today.. it’s like a cult

What you call(legal) conspiracy requires that a crime is planned (slightly different from common usage of the word). So what wsb did would only be conspiracy if they planned a crime.

>I don't think conspiracies suddenly become legal just because they were very large.

in theory you're right. The practice though says differently- the mass conspiracy and violation of medalion laws (Uber) and zoning laws (AirBnb) got treated as new phenomenon - "sharing economy" - instead of RICO because it was that massive and coordinated.

There is also another aspect here. The huge short interest on GME was most probably naked (illegal) in significant part, and those huge shorts were probably made in order to drive the price down (market manipulation, illegal). So, these crooks wouldn't have been caught with their pants down if SEC was doing its job and wasn't allowing (by lax enforcement at least) all these shenanigans to their hedge fund buddies. In that situation SEC suddenly becoming a crusader against market manipulation and going after WSB retail investors would look a lot like selective enforcement and a regulatory capture by the crooks.

Yes. Because u/TigBitties_450 is someone the SEC can track and prosecute. The anonymity of the reddit forum Just exposed a gigantic loophole that was suddenly shot into the spotlight. The jig is up.

- ISPs generally keep your IP logged for 6-18 months.

- Reddit has your IPs logged for 100 days.

- The SEC knows all financial transactions.

Shouldn't be too hard to triangulate u/TigBitties_450 if he actually did any trading on the stock.

Haha. U/TigBitties_450 and 500K others just bought 1 to 10 shares of GME, does the SEC see it as good use of their resources? If they are going to be fined it should be proportional to what hedge funds and banks get fined for similar transgressions.

They should take this in the chin as a massive failing on their part to regulate the market just like they did in '08 aftermath when trillions of dollars and the world economy crated because of those same banks and hedge funds.

Isn't conspiracy a kind of secret agreement?

Someone else committing a crime isn't really a defense to one's own crime though.

No, but if a law is applied inconsistently it raises questions about whether 1) the law is sensible 2) the regulatory system is unbiased. Pointing to such inconsistencies is a perfectly reasonable thing to do.

Resolving those inconsistencies in the law because of uneven enforcement would come quite a long time after the fact. But as the law stands now, this is probably illegal. I doubt anyone will be prosecuted for it, though.

I am not white washing hedge fund managers, but any hedge fund manager that would put in writing in an auditable system that he is considering manufacturing a short squeeze to hurt specific investors and went ahead and did it would have a tough time in court. No one with half a brain would do that (not that in recent history there hasn't been a handful of sub-half-brain bankers who documented their misdeeds in writing).

Yeah, but if you're Bill Ackman you can do it on front of millions of people on CNBC.

"During the epic verbal battle between Icahn and Ackman that was televised on CNBC in January, Icahn predicted that Ackman’s Herbalife investment could produce the “mother of all short squeezes.” Shortly after that incident, it became clear that Icahn had taken a big position in Herbalife’s stock. He has since expanded that position, bought 16.5% of the outstanding shares and gotten two representatives on Herbalife’s board."

https://www.forbes.com/sites/nathanvardi/2013/07/22/carl-ica...

That same page also says

"Investors and prospective investors should be cautious of rumors on chat rooms where the intent of nameless and faceless computer users is in doubt."

So it'd be a question of which is it? Is it don't trust internet forums or is it people shit posting memes is a coordinated attack?

Logically and morally you can't have it both ways. But we're seeing how morals don't matter when you go after the money.

An internet forum can be both full of rumors, and used for a conspiracy. I imagine people planning the US capital riots also posted a lot of rumors and memes.

That statement is just advisory for investors to 'be cautious'.

My hot take is that what they are doing is illegal, but when it comes down to it rulings are done by people, and the extent of their sympathy for the little guy will determine the outcome.

I agree with this.

In my opinion, if you have to state multiple times in your plan that what you're planning isn't illegal/manipulation, it's very grey at best.

The fact that one of the premises presented here for the price going up is "We buy a bunch of options, to force (ie, manipulate) someone else into buying the stock, so that the price can go up" doesn't boad well for a "it's not market manipuation" argument either.

Straight from this post:

> It looks like this: RH Call Option buying -> MM Delta hedging/share purchase -> short squeezing -> Greater retail/RHers price action chasing/call option buying -> MM Delta hedging/share purchase -> short squeezing -> Institutional and new channels flip the script -> GME to $400+

They've presented a chain of events that starts only with "We try to buy a lot of it", has a bunch of "other people have to buy based directly on our actions", they even through in a "other people see the price going up and try to pile in" (ie, screw the rest of retail).

> the extent of their sympathy for the little guy will determine the outcome

I don't see the masses of people ending up facing consequences here. I wouldn't be surprised if a group of WSB pushers who made out like bandits do see consequences. I also think it's going to be difficult to consider them the little guy if they make a bunch of money, and the much larger mass of non-WSB retail lose their shirts.

Why is publicly saying "hey, a few companies are selling shorts of gamestop and trying to drive it into the ground, I think that's bullshit. If you think it's bullshit, too, here's how you could do something about it." such a questionable thing to say and do?

Do you also want cancer charities to stop asking for donations? Should start up founders not be allowed to ask for investor money?

I could totally see the market manipulation argument if this was done in backrooms, with multiple accounts to hide the moves, several shell corporations holding the funds, etc. But these folks are publicly declaring their intent. And the first person to uncover the gamestop shorts has been saying it for over a year. Out in the open with frequent updates.

The short sellers have had a year to get out and leave the company alone, but they were so obsessed with watching a company die that people got pissed and wanted some blood.

The chain of events doesn't start with "we buy a lot and blah blah blah" - the chain of events starts with someone declaring over a year ago "fuck these guys for going all in on destroying a quality company for no reason other than the lulz."

I think the fact this discussion is so back-and-forth, with nobody being absolutely confident that this behaviour either is or is not market manipulation is interesting. To me, it points out that either a) nobody in these conversations knows anything or b) the laws themselves are inadequately described.

Surely a large group of people getting together and saying "GME is way too shorted, buy buy buy and don't sell until $5k" should either be absolutely definitely market manipulation, or absolutely definitely not?

> the laws themselves are inadequately described.

This. I recall seeing a post recently that essentially said that any action could be construed as securities law violation.

Is it that the laws are inadequately described, or just not really enforced? Most of the arguments for it not being market manipulation are just pointing to other obvious market manipulation that was never policed. If this was two hedge funds going after each other would anyone care?

> Do you also want cancer charities to stop asking for donations?

I'm going to assume this wasn't your point, but come on. Don't compare the current actions WSB and others are taking right now to curing cancer.

> Should start up founders not be allowed to ask for investor money?

Startup founders are already not allowed to ask for investor money buy posting on reddit or buying social media ads.

> with multiple accounts to hide the moves, ... these folks are publicly declaring their intent

I don't think anyone has fully look in to what accounts have been pushing things, and at this scale it will be incredibly difficult to do.

> Out in the open with frequent updates.

Just to be clear, I have absolutely no issue with anything DFV (who I assume you're referring to) has done in this situation. But DFV is not the entirety of "retail" that could have crossed a line here.

> "fuck these guys for going all in on destroying a quality company for no reason other than the lulz."

Lol I'm not even going to respond to this.

I reread the post and I kind of changed my mind on this particular post - it's very careful to stay within the bounds. But there are many others that are over it.

" if you have to state multiple times in your plan that what you're planning isn't illegal/manipulation, it's very grey at best."

I don't think this is logical. One could also say, "If people are accusing you of doing something illegal/manipulative and you don't respond by stating that it's not illegal, it's very grey at best."

>>In my opinion, if you have to state multiple times in your plan that what you're planning isn't illegal/manipulation, it's very grey at best.

Where is that done? I think you’re confusing everyone’s ‘this is not financial advice’ shenanigans with “this is not illegal.”

> much larger mass of non-WSB retail lose their shirts.

Can we agree this is hyperbole?

Do you expect that every single person who has bought GME stock in the last week is going to be able to sell it for (currently) $325?

Do you think that people who bought $200/share option contracts this week are all going to end up with 100 shares that they are going to be able to sell for $525 each?

Serious question? Why is that hyperbole?

The SEC could step in to resolve the squeeze and everyone who bought at 350 left holding the bag when the price drops to 30.

Not a lawyer but I would also be surprised that adding something like "let's discuss hypothetically..." at the top would be a defense against being accused of market manipulation if it is proven the person actually went ahead and transacted per the post.

Absolutely not, it's just an open discussion of ideas.

Straight from this post ...

> This is not fraud. There is no manipulation here. We aren’t forcing anyone to do anything. It’s going to happen with or without us. But I want to ride.

Well, if they say it's not fraud, who am I to say otherwise!

Joking aside, the "we just like the stock" "this is not financial advice" stuff is as much a defence as the Someone Who Isn't Me thing I remember seeing on drug-related forums years back. You feel like it's protection because you're not getting prosecuted for admitting something you know is at least in the ballpark of law-breaking, but in reality you're just small-fry that nobody cares about. The moment a big-time dealer is under the spotlight, no amount of SWIM is protection.

I don't expect anyone from WSB to receive repercussions for this, but afaik this is dangerous legal territory and their defensive phrasing is a facade.

To me, it seems like people just noticed something absurd in the market (a short % over 100) and were pointing it out.

It was a perfect set-up for a historical short squeeze if the right catalyst came along. And that catalyst wasn't simply the people on WSB, there were other catalysts such as the Chewey founder coming in, and then earnings reports.

Once those factors played out, the people who noticed the precarious position the hedge funds had put themselves in got to watch their exact predicitions come true.

I don't see how that can be confused with a pump-and-dump scheme or any sort of market manipulation.

I think if it turns out that (and I have no idea if this could be the case) some of the "key" figures in riling up WSB were holding GME prior, and sold like 2 days ago, that would be a pump-and-dump, right? I'm not totally sure, but I believe that fits the criteria.