May. 20, 2021
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. As a small retail investor, I do not have anywhere near the power to move markets as do large hedge fund conglomerates. Paltry penalties in comparison to the financial windfalls of cheating the system mean that the regulatory system is at the very least allowing, if not incentivizing, many large market actors to behave unethically. This proposed rule change at least goes some small way to changing that. Small retail investors are all too often subjected to numerous and repeated short ladder attacks by manipulative hedge fund companies. By repeatedly borrowing shares they do not own to rapidly trade between themselves with computer controlled algorithms to drive stock prices in whichever direction suits their needs, be it ensuring call options they would have to pay finish ‘out of the money’ or call options they hold finish ‘in the money’. All to often these hedge funds bet against companies with call options with the intent of bankrupting them and never having to ‘cover’ or pay up for these borrowed shares they never owned. This is simply un-american. Other unscrupulous tactics these large market manipulators employ are: releasing fake articles about companies via hired ‘reporters’, paid social media attacks and trading favors/information to talking heads colluding to halt buying, and synchronized bots attacks to manipulate price action. One former hedge fund manager was even posted in a YouTube video outlining all the illegal activities he participates in and deriding the SEC for being too dumb and inept to catch him, and that even if caught the fines were so small in comparison to the benefit it was worth it. The video has since been removed, but I’m sure with a little effort you can find it somewhere. Stronger rules and stiffer penalties enacted for violations are the only way to make a fair playing field. Without that we will continue to witness the financial ruin of many otherwise solvent companies. Investing should be about building wealth, about building companies, building the economy, and moving the entire process forward, not allowing conglomerates with enough money to manipulate things to gamble on whatever outcome they can force in order to steal from others and game the entire system. The damage that hedge funds can cause by perpetually overextending themselves on degenerative gambles and manipulation is limitless and potentially catastrophic. We have seen this before and it will happen again if more rules such as this are not implemented and strongly enforced. Sincerely, Jason Schoellig