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The SEC Cracks Down On The Biggest Market Threat: Short Sellers On Twitter
It's not HFTs; It's not global orchestrated central bank intervention in "markets"; it is not even confirmed manipulation of virtually every asset class by the Too Big To Prosecute banks, who instead of doing research spent time colluding in anonymous chat rooms how to manipulate everything from FX, to Treasurys, to gold.
No: according to the SEC what is truly broken with the markets, and why two-thirds of Millennials have lost faith in stocks, are short sellers "manipulating" stock prices on twitter.
In an interview with Bloomberg, SEC chair Mary Jo White (who had to recuse herself from some of the SEC's biggest enforcement cases as a result of her prior work) said that instead of dealing with far more pressing issues for why retail investors have practically deserted the entire market due to its wholesale manipulation by embedded interests, U.S. regulators are "reviewing whether to make short sellers step out of the shadows, as negative comments by research firms increasingly batter share prices."
That's odd: if it wasn't for "negative comments" by research firms nobody would have uncovered Philidor, and Valeant's questionable and now defunct specialty pharma relationship. But why bother with uncovering alleged criminality when keeping this quiet would have meant lack of billions in losses for those who the SEC is sworn to protect: billionaires who manage other people's money, based on some clearly terrible investment decisions.
Just as surprising: the SEC is not planning a crackdown on "positive comments by research firms" that send prices surging - because when it comes to "price discovery", the SEC is all about cracking down on manipulation but mostly when it is manipulation leading to lower prices.
Bloomberg continues:
“It’s a complex sort of landscape, but it is an issue that has our intense attention,” Securities and Exchange Commission Chair Mary Jo White said during an interview on Bloomberg Television on Tuesday in response to a question about whether the agency would consider rules requiring short-selling disclosures by investors. She declined to discuss specific companies.
“Short selling has a legitimate, positive purpose in the marketplace,” White said. “That’s very different, though, than if you manipulate by short selling.”
It's not just short-sellers though: it is short sellers on Twitter of all places. "White said Twitter is an information source that must be policed actively, and a 140-character Twitter posting and a four-hour presentation are essentially the same."
"Policed actively" when it leads to drop in any one price but when momentum-chasing momos (or better yet, Virtu algos) push up Div/0 PE companies to beyond infinity, well... jus go to town.
So this is the SEC's stance: a crackdown on evil, Twitter-based short-sellers is imminent. But when you manipulate by going long, or leaking details of your stake to the press sending the price surging so you can sell into the jump, or when Ackman colludes with the CEO of Valeant on a hostile bid for Allergan... that's when the SEC turns a blind eye to its other favorite activity - watching taxpayer-funded porn.
Another irony: more disclosure wouldn’t necessarily affect short sellers like Citron’s Left, who makes his bearish views of companies public. Mallinckrodt has “significantly more downside” than Valeant, Citron said in a Twitter posting on Monday. The firm had previously accused Valeant of inflating sales using specialty pharmacies such as Philidor RX Services. From 2010, Valeant shares rose more than 10-fold to peak in August. Since then, they have lost 67 percent of their value as of Monday’s close.
What the SEC apparently fails to grasp is that just like sellside research companies, which incidentally are merely a gateway to extracting profitable investment banking fees from the research target (see "Tying The Valeant Roll-Up Together: Presenting The Goldman "Missing Link") and providing interview opportunities to the banks' best sellside clients, shorter are a far more valuable source of incremental information as they have a true motivation of looking at both sides of the story, not just the bullish one.
Which, incidentally, is the problem with the Fed, the IMF, the World Bank, and virtually every other economic organization whose forecasts are now so tainted with rose-colored glasses even Reuters is making fun of them. Confused? Read "Watchdogs struggle to explain "optimism bias" in rosy GDP forecasts" - perhaps the answer is that the SEC will crack down on those who anonymously have a pessimistic, as in realistic, bias in their forecasts.
But don't despair at the SEC's stupidity: it could get worse - all it takes is for White to look at how China deals with "malicious sellers" and suddenly America's prisons would be full overnight.
Full interview below:
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Does this mean Carl Icahn is going to jail? No? Curious, I thought laws applied to everybody, even those who manipulate stocks to the long side.., silly me.
Carl is just a poor, misunderstood toy of market forces. The answer is to outlaw basements, since this is where all the criminal masterminds hang out.
Princess Blythe has moved on to better things, why can't the SEC?
What a fucking whorehouse of spectacle. Always imagined one had to follow the tracks down to where they met the river and behind the old distillery to witness such debauchery.
Except Citron is going after big pharma, so the tracks lead to the back door of the state capitol and courthouse. Which means the SEC will soon be banning short sales in pharma and actively tracking down negative comments directed at the drug companies under authority of the Patriot Act. Because, yeah - they can do that.
I took Nozula, and all I got was the condition known as "Hot Dog Finger."
Tweeting about drugs is nowhere near as bad as listening to the drug ads themselves.
I do agree they will protect their turf though.
pods
The SEC is the poster child for regulatory capture.
Yep, but they keep Pornhub in business......
I am still waiting for someone to investigate Draghi for talking down the price of the Euro.
This SKANK is a GS employee...
Can anyone name me a single woman in the Obama administration in charge of an alphabet agency that hasn't been rocked with scandal?
Can anyone name me a single woman in the Obama administration in charge of an alphabet agency that has or will be going to jail for criminal activities within their alphabet agency?
Replace 'woman' for 'man' and you're still good.
And calling Mary Jo a 'woman' is a stretch...
https://www.google.com/search?q=Mary+Jo+White+SEC&espv=2&biw=1024&bih=68...
Yeah what is it with government and the proliferation of he-shes?
Reno, Janet Napolitano etc etc
Politics is Hollywood for UGLY people!
She looks like Mickey Rooney with a Moe Howard haircut...
the whole System is allready dead! The only thing which keep a little life in the System is the MANIPULATION.
So if they stop the manipulation, they stop the complet System.
please read for example this book: The Burden: A warning of things to come http://www.amazon.com/Burden-warning-things-come/dp/0615780431/ref=asap_...
then you know what`s coming next!
Which bathroom does IT use?
A face only a transexual parent could love
As a "millennial", I'll invest in the market when there is one.
She's pulled Twitter's Shorts down and i'm not impressed.
sooo,
selling Calls and buying Puts is bad too?
What about buying inverse ETF's?
I'm going short all day just to protest.
The Ministry of Truth hard at work.
What will the SEC go after next, cat videos on YouTube?
More like the Ministry of Magic.......
that man has a squirrelly voice, sounds like a midget, is he a dwarf?
So it's going to be against the law to say "sell Twitter stock" on Twitter?
China thinks it's a good idea......
Now that someone found something useful to use twitter for, they want to shut it down?
It would be hysterically funny to see a simultaneous, hundreds of thousands, mass Twitter saying, "sell Twitter now."
Gotta use up those 2 billion rounds of 9mm hollow-point ammo somehow.
Carl Icahn and David Tepper can go on national TV and pimp their investments, but mention fraud in tiny tweet and it's off to Jail
Not to mention Morgan Stanley's $800 price target today on AMZN
They must have given the SEC, Twitter Gift Cards for an early Christmas present...
When shit is shit...........you can't cover it up forever. One way or another people will find out.
I was looking for the term "shit show" for the up vote. your's came closest. congrats.
What does she do for a living beside shill for Banksters?
Dig up some kid in his mom's basement with an Etrade account and a Twitter account, dammit!
I am sure Goldman, JPM, Fidelity, Bill Gross, sovereign wealth funds, and all hedge funds monitor Twitter feeds from unknown schmucks before deciding any trades!
What do you expect when Moe Howard is running the SEC?
I'm wondering how much false-flag reverse pump & dumping is going on? think about it: if you're ceo of xyz & want to make some easy $ just arrange for a 3rd party to leak false bad news about xyz, watch stock drop, deny it, buy it & when rumor's proven false just say: "hey, I publicly told everyone it was false before I bought! I was just putting my $ where my mouth is! how is it my fault if people chose not to listen?"
Here is a good site that tracks the collusion between the short sellers, the media and the SEC (& other regulatory bodies).
http://bobosrevenge.blogspot.com/
If the SEC is going to punish Twitter short sellers, then it is because they don't want the competition to their current scam.
Sounds like Apple's Cook is fine but Tesla's Musk is under investigation. Compare and contrast.
http://www.nytimes.com/2015/08/25/technology/tim-cook-of-apple-seeks-to-...
http://money.cnn.com/2013/10/25/investing/tesla-netflix-momentum-stocks/
Kramerika
For goodness sakes, how would the SEC even know about twitter if they weren't skimming it all day long. I suggest the SEC should keep the hell off twitter during business hours and concentrate their efforts on catching the real bad guys.
The real problem they will find is how to make all public truth telling illegal.
The real problem they will find is how to make all public truth telling illegal.
An aquaintance divulged that "some" big bank traders have been known to communicate through online multi player game private messages. Such clever boys and girls. I guess the regulatories need to learn World of Warcraft and Medal of Honor
I taut i taw a twitter twat, i did, i did!
Poor Twatters, they have enough problems as it is , now the SCARY porn surfing jackoffs in the SEC are on their case? They need to protest against this raycism and aggression asap.
There's something hilarious about a midget or one of the lollipop kids (from The Wizard of Oz) going after short sellers on twitter.
There is also no limit on how fucking surreal the United States has become.
Sell, sell, sell before it's too late.
I have no position in any of these companies but I know I lost money in mutual funds that had Tyco, Enron, WorldCom, Citibank, BoA and every other fraudulent company out there.
Anyone want to trade some penny stocks? No fraud in those. How bout those pink sheet companies?
Bring back Mark to Market and Glass Steagal and then maybe you could be taken seriously.
One more thing how long did it take to bring down Bernie?? How many years went by and how many people tried to get the SEC to investigate his operations?
Sounds to me like the SEC is long Twitter.
Ameristan?
Sounds a lot more like China.
These people in the shadows are "whistleblowers" and you know what we do to peope who expose crimes. In the case of the Clintons they shoot them but we are government and above all that so we just send them to jail for exposing fraud and corruption.
There. Fixed it.
Fuck market makers, fuck short selling. Phantom shares are an antiquated practice which have no place in electronic markets.
"SEC chair Mary Jo White" She still has a job????
I thought she got booted a long time ago. Hadn't heard the name in a long time, probably because she hasn't done anything useful in a long time.
tribe member?
“Short selling has a legitimate, positive purpose in the marketplace,” White said.
Short covering rallies?
"...according to the SEC what is truly broken with the markets, and why two-thirds of Millennials have lost faith in stocks, are short sellers "manipulating" stock prices on twitter."
Does she mean the short sellers that manipulated the DOW from 6,500 up to 18,000?
REINSTATE GLASS STEAGALL AND OUTLAW HFT'S YOU DUMB AS A FUCKING ROCK GOV RETARDS!
THE PUBLIC IS WAKING UP TO THE FRAUD SHELL GAME AND ARE TIRED OF IT.
THE SOLUTION IS THAT FUCKING SIMPLE YOU GODDAMN MORONS!