Oct. 25, 2021
Let me start by saying that I believe in your work and I trust that you will steer the SEC back onto the right track, which is to protect the US markets and its investors from fraud. That said, the American people need you to be transparent and matter-of-fact in your statements about what is happening with our stock markets right now. Your tweet calls out an unnamed stock for price volatility, but you are not laying out the truth of the matter. In case there is any confusion, I will lay it out right here: $GME is a prime example of what happens when entities gain too much power and influence over the market. Major investment firms, one of which in particular is also a market maker (major conflict of interest, in my opinion), bet against GameStop after their antiquated business model showed signs of financial collapse after the pandemic began to take a toll on their earnings. While shorting is a long-standing practice of Wall Street, the implementation of trading technologies has given market makers and investment firms unparalleled control over the price movement of companies, and enabled them to engage in practices that are illegal and unethical with very minimal government oversight and negligible repercussions if caught. These firms have demonstrated practices of rampant "naked shorting", in which synthetic (fraudulent) shares are being sold on lit exchanges in order to increase sell pressure to overcome retail investor interest in a company. Retail investors have flocked to GameStop ($GME) after prominent figures of social media were willing to bet their entire net-worth on the success of the company, and placed their trust in the American market to engage in true price discovery so as to raise a nearly valueless stock to its real price per share. What has been learned along the way is that it is currently impossible for GameStop to reach its true value because the entities involved in naked shorting have created synthetic shares far above and beyond the actual float, and they continue engaging in illegal behaviors daily in order to artificially drive down the price to avoid failing a margin call. As more and more FOMO investors jump on-board, the value of $GME has organically increased in spite of all efforts to drive the price down and mitigate short interest costs. This cannot, and will not, go on forever. Eventually, a cascade of margin calls will topple numerous institutions that have over-leveraged on their naked shorting scandal and they will be unable to close their short positions at anything less than astronomical and never-before-seen share prices. One of the primary reasons that shorting has been allowed for decades is the known fact that shorting a stock comes with "infinite risk". Because of the influence these institutions have over the markets, the idea of infinite risk has always been scoffed at because the risks were controlled and the penalties would never outweigh the benefits. For the first time ever, we are truly witnessing an "infinite risk" event as retail investors of the global economy have accepted the offerings of these synthetic shares and as a result, retail owns in excess of the entire GameStop float with certainty. These same retail investors have experienced generations of income inequality, poor living conditions, a failed healthcare system, and a transition from a free and fair market regulated by a government "for the people" to a corrupt oligopoly where money is power and power is absolute. In this once in eternity event, retail investors can and will set the price for these corrupt institutions to fulfill their legal obligations to exit their positions, and the ramifications will resonate far beyond Wall Street and far beyond the American borders. Right now it is your utmost prerogative to take affirmative action to preserve the integrity of the American markets and stop the can-kicking before this event snowballs out of control. It is imperative that you bring the truth of financial corruption to light, and introduce regulations that will close every loophole these corrupt organizations have and can use to destabilize the American economy for profit. Real people have been, are being, and will continue to be hurt every time they abuse these loopholes. If you do not wish to hold them accountable, then in the words of Ryan Cohen "buckle up" because the retail investors will and the aftermath will change history. Sincerely, An American Retail Investor