Gamestop

[Bank of Hawk]

Oh, make no mistake, the financial world as well as some on this board want the small retail guys to fail. It is astonishing the lack of commentary on the hedge funds blatant manipulation And illegal activities.

The best advice is still the tried and true, dollar cost average, buy and hold high performing funds or ishares or blue chips. After that, sure take some fun money and speculate as much as your heart desires. But the blue print is out there, just too boring to follow for most.

 

[luvmyhawks]

The best advice is still the tried and true, dollar cost average, buy and hold high performing funds or ishares or blue chips. After that, sure take some fun money and speculate as much as your heart desires. But the blue print is out there, just too boring to follow for most.

lol.

 

[Bank of Hawk]

lol.

You seem like a smart guy, is there something wrong with buying and holding and dollar cost averaging?

 

[steelhawkeye]

Predicting the retail investors would fail wasn’t rooting for them to fail. Didn’t take a degree in finance to know what the inevitable outcome would be.

You're right...shouldn't take a degree in finance to know that the HF's would lie, steal, cheat to protect themselves from losing billions.

Did you predict that RH would stop people from buying?

 

[luvmyhawks]

You seem like a smart guy, is there something wrong with buying and holding and dollar cost averaging?

Not at all. Just have no clue what it had to do with my post. Also, don’t forget to ask your brother and sil, who works for hedge fund, why it is ok for hedge funds to do illegal stuff. And no, pensions being invested in them is not an acceptable answer.

 

[Bank of Hawk]

Not at all. Just have no clue what it had to do with my post. Also, don’t forget to ask your brother and sil, who works for hedge fund, why it is ok for hedge funds to do illegal stuff. And no, pensions being invested in them is not an acceptable answer.

can you recap what illegal activities you are referring to?

 

[luvmyhawks]

can you recap what illegal activities you are referring to?

Did you read the other post I quoted of your? if not, go check it out.

 

[steelhawkeye]

I don't think most of the WSB want to lose money to prove a point. I'm curious why you think that.

Sorry, I don't think I articulated what I was trying to say very well. Of course WSB wants to make money. But in this instance, many are adamant about GME's holdings, the short interest, and the blatant manipulation to try and drive this stock price down, that they are willing to hold as long as it takes to prove themselves right.

 

[mnole03]

have a bro who works at a large financial institution on Wall Street and prices ipos, actually now manages a team that prices IPOs. his gf works at a hedge fund.

Anyhow, talked to him this weekend and he really laid into the wsb’s and among many things he pointed out, most of these institutional investors are the funds for the many such as pensions a lot of our teachers, firefighters, policemen. Etc. public officials rely upon and if the pension funds were only allowed to invest in t-bills, they would be sol. Young generations don’t have pension funds like the boomers, so maybe us young people are upset about that?

I do worry about Ma and Pa Hedge Fund.

 

[Bank of Hawk]

Did you read the other post I quoted of your? if not, go check it out.

Seriously which post are you referring to? I checked back on posts you quoted me of and not seeing the illegal acts. Granted I haven’t been in this board since Friday until tonight, so you may have quoted something earlier that didn’t catch my radar.

 

[luvmyhawks]

Seriously which post are you referring to? I checked back on posts you quoted me of and not seeing the illegal acts. Granted I haven’t been in this board since Friday until tonight, so you may have quoted something earlier that didn’t catch my radar.

post #1194. If you don’t know the illegal activity in my post, then please stop posting on this topic and go do some research for yourself as opposed to listening to someone who works for a hedge fund.

 

[Bank of Hawk]

post #1194. If you don’t know the illegal activity in my post, then please stop posting on this topic.

How do we know the same shares that were borrowed were not also borrowed? I can borrow your bike and then let someone else borrow it.

 

[luvmyhawks]

How do we know the same shares that were borrowed were not also borrowed? I can borrow your bike and then let someone else borrow it.

wrong answer. Try again. Do a little more research. What they were doing is illegal. Pensions investing in them doesn’t make them exempt.

 

[Bank of Hawk]

I get it the short was over 100% of shares outstanding which is illegal, in a vacuum.

 

[Finance85]

Sorry, I don't think I articulated what I was trying to say very well. Of course WSB wants to make money. But in this instance, many are adamant about GME's holdings, the short interest, and the blatant manipulation to try and drive this stock price down, that they are willing to hold as long as it takes to prove themselves right.

I don't believe that. Restating it doesn't change the meaning. I don't think anyone wants to lose money to prove a point. And the WSB leaders had to know they were sucking in inexperienced traders. IMO, it was a pump and dump with the outside chance it would bite shorts.

 

[steelhawkeye]

I don't believe that. Restating it doesn't change the meaning. I don't think anyone wants to lose money to prove a point. And the WSB leaders had to know they were sucking in inexperienced traders. IMO, it was a pump and dump with the outside chance it would bite shorts.

You think WSB was trying to pump and dump? Have you been on the forum?

 

[Finance85]

You think WSB was trying to pump and dump? Have you been on the forum?

Do you understand the nature of pump and dump? People who are good at it don't hire a squad of cheerleaders. It's more calculated.

 

[luvmyhawks]

I get it the short was over 100% of shares outstanding which is illegal, in a vacuum.

No vacuum, illegal. Period. Some guys caught it, and exposed it. Not a pump and dump. once fully exposed, they were about to take it in the shorts, no pun intended. Until, well........

 

[luvmyhawks]

Do you understand the nature of pump and dump? People who are good at it don't hire a squad of cheerleaders. It's more calculated.

I understand a pump and dump. Tell me what the false and misleading statements were regarding gme to inflate the price.

 

[Bank of Hawk]

Shorting

In 2005, the SEC formally adopted Regulation SHO that is intended to prevent illegal naked shorting and stock manipulation which it facilitates. It defines locate and close out requirements relating to stock borrowed to execute short sales. It also places limits on trading in threshold securities that have experienced substantial Failures to Deliver in which a stock in a short sale is not delivered at settlement. For an ordinary short sale, the stock must be located before the short sale can be executed. However, “bona fide” market makers are exempted from this rule and can short shares without locating the stock. This is naked shorting which if executed in accordance with the rules of Reg SHO is legal. When these rules are not followed, it becomes an illegal naked short.

so it boils down to Reg SHO on the legality?

If the stock involved in the naked short can be located and borrowed in the two day period before settlement, it is just an ordinary short sale. However, if the stock cannot be located and borrowed prior to settlement, it creates a Fail to Deliver (FTD) situation. If the case of an FTD, a broker dealer is supposed to take cash from the short account and purchase shares in the open market to close out the position. “Bona fide” market makers who are perceived as providing liquidity to stock trading can maintain naked shorts for a longer six day period.

In practice, these provisions are routinely circumvented so that FTDs are not closed out. This results in the creation of counterfeit shares which the DTCC treats in the same manner as legal, registered shares. A nearly unlimited supply of such counterfeit shares can be created to overwhelm buy interest in a stock and drive down the price. This is a routine practice on Wall Street that is at the heart of innumerable manipulation schemes.

Locate Requirement

Ordinary investors are required to locate and borrow shares from another investor who is long the stock before executing a short sale. However, under Reg SHO, broker-dealers are treated differently and are allowed to execute a short sale without having borrowed the stock. Rule 203 (a) states that if broker dealers have reasonable grounds to believe that the security can be borrowed and delivered on or before the date that delivery is due, they can naked short. This often relies on easy to borrow lists of securities that are generated and policed by prime brokers. Hard to borrow lists are also maintained which are intended to prevent naked shorting in stocks that appear on this list.

Under Reg SHO then, a broker dealer can short stocks appearing on the easy to borrow list without first locating the shares to be delivered at settlement. If the shares are not located in time or not at all as in the case of illegal naked shorting, this is called a Fail to Deliver (FTD). The SEC says that repeated FTDs is a reason to remove the stock from the easy to borrow list. Stocks on the hard to borrow list should not be shorted before a locate. Also, absence from the hard to borrow list does not satisfy the reasonable belief requirement.

There is considerable ambiguity in the SEC’s reasonable belief definition and the easy and hard to borrow lists are created and maintained by broker dealers, not the SEC. These lists are subjective with no standard guidelines. This vague rule enables illegal naked shorting. Brokers can also use the DTCC’s stock borrow program to circumvent this requirement. The stock borrow program is little understood and is at the heart of much illegal naked shorting.

—
Sounds like all the rules may be written but the lack of enforcement by the SEC of the rules is also at play. Cannot say the SEC has not been aware of these practices because they are public knowledge, so if a rule isn’t being enforced, what’s the advantage of one hedge fund following all the SEC rules and down the street another hedge fund is circumventing the rules in front of the SEC making 8% more and attracting all the big money.

 

[steelhawkeye]

Do you understand the nature of pump and dump? People who are good at it don't hire a squad of cheerleaders. It's more calculated.

Yeah, I do. It's pretty clear you don't. Do you think a short squeeze is the same thing as a pump and dump?

 

[luvmyhawks]

Shorting

In 2005, the SEC formally adopted Regulation SHO that is intended to prevent illegal naked shorting and stock manipulation which it facilitates. It defines locate and close out requirements relating to stock borrowed to execute short sales. It also places limits on trading in threshold securities that have experienced substantial Failures to Deliver in which a stock in a short sale is not delivered at settlement. For an ordinary short sale, the stock must be located before the short sale can be executed. However, “bona fide” market makers are exempted from this rule and can short shares without locating the stock. This is naked shorting which if executed in accordance with the rules of Reg SHO is legal. When these rules are not followed, it becomes an illegal naked short.

so it boils down to Reg SHO on the legality?

If the stock involved in the naked short can be located and borrowed in the two day period before settlement, it is just an ordinary short sale. However, if the stock cannot be located and borrowed prior to settlement, it creates a Fail to Deliver (FTD) situation. If the case of an FTD, a broker dealer is supposed to take cash from the short account and purchase shares in the open market to close out the position. “Bona fide” market makers who are perceived as providing liquidity to stock trading can maintain naked shorts for a longer six day period.

In practice, these provisions are routinely circumvented so that FTDs are not closed out. This results in the creation of counterfeit shares which the DTCC treats in the same manner as legal, registered shares. A nearly unlimited supply of such counterfeit shares can be created to overwhelm buy interest in a stock and drive down the price. This is a routine practice on Wall Street that is at the heart of innumerable manipulation schemes.

Locate Requirement

Ordinary investors are required to locate and borrow shares from another investor who is long the stock before executing a short sale. However, under Reg SHO, broker-dealers are treated differently and are allowed to execute a short sale without having borrowed the stock. Rule 203 (a) states that if broker dealers have reasonable grounds to believe that the security can be borrowed and delivered on or before the date that delivery is due, they can naked short. This often relies on easy to borrow lists of securities that are generated and policed by prime brokers. Hard to borrow lists are also maintained which are intended to prevent naked shorting in stocks that appear on this list.

Under Reg SHO then, a broker dealer can short stocks appearing on the easy to borrow list without first locating the shares to be delivered at settlement. If the shares are not located in time or not at all as in the case of illegal naked shorting, this is called a Fail to Deliver (FTD). The SEC says that repeated FTDs is a reason to remove the stock from the easy to borrow list. Stocks on the hard to borrow list should not be shorted before a locate. Also, absence from the hard to borrow list does not satisfy the reasonable belief requirement.

There is considerable ambiguity in the SEC’s reasonable belief definition and the easy and hard to borrow lists are created and maintained by broker dealers, not the SEC. These lists are subjective with no standard guidelines. This vague rule enables illegal naked shorting. Brokers can also use the DTCC’s stock borrow program to circumvent this requirement. The stock borrow program is little understood and is at the heart of much illegal naked shorting.

—
Sounds like all the rules may be written but the lack of enforcement by the SEC of the rules is also at play. Cannot say the SEC has not been aware of these practices because they are public knowledge, so if a rule isn’t being enforced, what’s the advantage of one hedge fund following all the SEC rules and down the street another hedge fund is circumventing the rules in front of the SEC making 8% more and attracting all the big money.

First, this was from 2005. Rules changed after 08. But I agree the sec didn’t do their part in regulation. That doesn’t make it right. Oh, and while we are at it, look at another illegal activity these funds were doing by not delivering securities. The lengths people are going to defend these hedge funds is infuriating.

 

[Bank of Hawk]

First, this was from 2005. Rules changed after 08. But I agree the sec didn’t do their part in regulation. That doesn’t make it right. The lengths people are going to defend these hedge funds is infuriating.

We can agee that the SEC is a paper tiger when it comes to enforcing the rules on the major players. The hedge funds are like James Harden with his step back three, never had anyone call it a travel but it is a travel, and it gets called a travel in high school.

 

[L. Wade Childress]

Well that's BS too. This should put an end to the trading model that RH is built on.

it not BS though. Brokerages have capital requirements, and they are in place due to regulations. There’s no choice but to follow them.

 

[SoDakHawk]

have a bro who works at a large financial institution on Wall Street and prices ipos, actually now manages a team that prices IPOs. his gf works at a hedge fund.

Anyhow, talked to him this weekend and he really laid into the wsb’s and among many things he pointed out, most of these institutional investors are the funds for the many such as pensions a lot of our teachers, firefighters, policemen. Etc. public officials rely upon and if the pension funds were only allowed to invest in t-bills, they would be sol. Young generations don’t have pension funds like the boomers, so maybe us young people are upset about that?

But also he pointed out this has all the makings of a pump and dump scheme, even if that wasn’t the intent, anyone who has invested in penny stock knows the feeling, see a hot stock, put a few bucks in , it goes up 100% and then boom you’ve lost it all when the pumpers dump. Even if that wasn’t the intent, that is now the outcome.

How about the institutional investors and hedge funds don't short a company to 130%? That's the type of reckless behavior that started this whole situation.

 

[L. Wade Childress]

I sure hope nobody took their mortgage and went in on this "sure thing"... I seem to remember 1000 or 10,000 being talked about on here.

The market is a rigged game and always has been. You just hope you are lucky to be on the right side of a fix.

the market is rigged how? Let’s say a hedge fund IS front running trades. How much do you think that is REALLY costing you? Enough to stay out of the equity markets over 30 years? Just because you aren’t getting theoretical best execution?

 

[Bank of Hawk]

How about the institutional investors and hedge funds don't short a company to 130%? That's the type of reckless behavior that started this whole situation.

Don’t disagree, but why the anger now when it’s been happening for many many years by market makers?

 

[L. Wade Childress]

How do does anyone posting on this board actually know that the shares they hold in their portfolios are actually legitimate shares? Anyone?

uh, audited financials?

 

[SoDakHawk]

it not BS though. Brokerages have capital requirements, and they are in place due to regulations. There’s no choice but to follow them.

Correct. The BS part was, well, nevermind. I can't even remember back that far in the thread.

There was a lot of shady shite that has gone on around this whole thing. I still maintain shorting a stock to 130% was the root of all this.

 

[SoDakHawk]

Don’t disagree, but why the anger now when it’s been happening for many many years by market makers?

The light finally got shined nationwide for all to see this time. That's why there is anger.

 

[L. Wade Childress]

Brah, do you not even sense the sarcasm?

Brokers have to limit the trading in stocks with high volume and volatility due to liquidity issues. I get that. They don't just shut things down for no reason, and the reasons they do are outlined in the broker agreement.

Maybe the bigger issue that needs to be focused on in the future is fair access to markets for the smaller investor because right now they don't have the same market access as the institutional traders. Given modern technology and real time capabilities, why is that? The best analogy I can think of is the commercial investors are trying to compete with the institutions and hedge funds by driving a Dodge Charger while the big guys are driving F1 cars. The little guys are trying to get their trades executed through RH while the big guys are lapping them.

really? You don’t get why this is?

 

[Bank of Hawk]

The light finally got shined nationwide for all to see this time. That's why there is anger.

Is the anger pointed in the right direction? I think the anger should be pointed at the lack of engagement of enforcing rules by the sec. They appear to be an organization that administers licensing and goes after the clearly illegal targets they can easily prosecute.

 

[L. Wade Childress]

As with most things that happen on social media, the anger stems from a victim mentality and a lack of knowledge on how things work.

 

[dgordo]

I still maintain shorting a stock to 130% was the root of all this.

It was but that is on the brokers not the buyers.

 

[Phenomenally Frantastic]

uh, audited financials?

Like Enron? Great auditing there. Or GE’s fictitious fantasy accounting? What does your answer have to do with my question?

Where is the registration of stock even held?

The DTCC? Who audits them?

DTCC

 

[Phenomenally Frantastic]

“Naked short sellingEdit

Several companies sued DTCC, without success, over delivery failures in their stocks, alleging culpability for naked short selling. Furthermore, the question of whether DTCC is culpable for naked short selling was raised by Senator Robert Bennett and the North American Securities Administrators Association (NASAA), and discussed in articles in The Wall Street Journaland Euromoney.[44][45] DTCC contended that the suits were orchestrated by a small group of lawyers and executives to make money and draw attention from the companies' problems.[45]

Critics blamed DTCC, noting that it is the organization in charge of the system where the naked short selling happens, alleging that DTCC turned a blind eye to the problem, and complaining that the Securities and Exchange Commission (SEC) had not taken sufficient action against naked shorting.[45] DTCC responded that it had no authority over trading activities, and could not force buy-ins of shares not delivered,[46] and suggested that naked shorting was simply not widespread enough to be a major concern. The SEC, however, viewed naked shorting as a sufficiently serious matter to have made two separate efforts to restrict the practice.[45] DTCC has said that the SEC has supported its position in legal proceedings.[46][47][48]

In July 2007, Senator Bob Bennett, Republican of Utah, suggested on the U.S. Senate floor that the allegations involving DTCC and naked short selling were "serious enough" to warrant a hearing. The Senate Banking Committee's Chairman, Senator Christopher Dodd, indicated he was willing to hold such a hearing.[49] No such hearing was ever held, however. Representing state stock regulators, the NASAA filed a brief in a 2009 suit against DTCC, arguing against federal preemption as a defense to the suit. NASAA said that "if the Investors' claims are taken as true, as they must be on a motion to dismiss, then the entrepreneurs and investors before the Court have been the victims of fraud and manipulation at the hands of the very entities that should be serving their interests by maintaining a fair and efficient national market".[50] The suit was dismissed. Critics also contended that DTCC and the SEC were too secretive with information about where naked shorting was taking place.[45] DTCC said it supported releasing more information to the public.[46]

In recent years this controversy died down, as the impact of changes to SEC Rule 203 under Regulation SHO adopted in 2008 dramatically curtailed long-term short positions, and complaints about "naked short" positions declined.”

 

[seminole97]

I don't think anyone wants to lose money to prove a point.

I've donated money to Ron Paul's presidential campaign.

Sorry, closest thing I've got.

 

[luvmyhawks]

Don’t disagree, but why the anger now when it’s been happening for many many years by market makers?

Brother, there have been calls against hedge funds for as long as I can remember. I have done it many of times on this very forum.

 

[luvmyhawks]

it not BS though. Brokerages have capital requirements, and they are in place due to regulations. There’s no choice but to follow them.

Hopefully this will be the end of robin hood. I’m calling bs on this capital requirements non sense. If a firm can’t meet their capital requirement, why would someone ever invest through them?

 

[luvmyhawks]

It was but that is on the brokers not the buyers.

Even more reason to be skeptical of the shenanigans of the past week. B/d’s over sell, don’t deliver, then, when people want to buy...... you seriously can’t make this shit up. Biggest problem, nothing will change. Ever. Protect the big dogs, always.