SEC Charges Two Individuals for Wash Trading Scheme Involving Options of "Meme Stocks"
sec.gov/news/press-release/2021-195
sec.govPosted Sep 27, 2021, 2:16 PM UTC
21225
sec.gov"This case demonstrates the SEC's ability to quickly investigate and
expose complex trading schemes, including those conducted during times
of significant market volatility."
Yeah, right. Where's that GME Report!
31
Only took 6 months! I really hope there is more to come...
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Sounds like they found some suckers to throw under the bus to make it seem like they're doing something. We'll see Gary ol' chap, we'll see. 💎🙌🚀🚀
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From the link:
According to the SEC's complaint, filed in the United States District Court for the District of New Jersey, starting in late February 2021, Suyun Gu became aware of the increased market volume and volatility driven by so-called "meme stocks" – stocks that were being actively promoted on social media platforms. Gu allegedly then devised a scheme to take advantage of the "maker-taker" program offered by exchanges by trading options of these stocks with himself.
Under the maker-taker program, a trade order that is sent to an exchange and executes against a subsequently received order makes liquidity and generates a rebate from the exchange. In contrast, an order that immediately executes against a pre-existing order takes liquidity and is charged a fee.
The SEC's complaint alleges that Gu was able to generate illicit profits by using broker-dealer accounts that passed rebates back to their customers to place initial orders on one side of the market, and then using broker-dealer accounts that did not charge fees for taking liquidity for his subsequent orders on the other side of the market. When identifying a product to trade, Gu and his friend and business associate, Yong Lee, selected far out-of-the-money put options on some "meme stocks," which they thought would be easier to trade against themselves because interest in buying the "meme stocks" and related price increases would make put options on those stocks less attractive. After certain broker-dealers closed Gu's and Lee's accounts in early March 2021, Gu was able to continue the scheme through mid-April 2021 by lying to broker-dealers about his trading strategy, using accounts in the names of other people, and accessing these accounts through virtual private networks to hide his activity. The complaint alleges that Gu executed approximately 11,400 trades with himself, netting at least $668,671 in liquidity-rebates, and that Lee executed approximately 2,300 trades with himself, netting $51,334 in liquidity-rebates. In addition to collecting these ill-gotten rebates, the wash trading scheme allegedly impacted the market as it skewed the volume in certain option contracts and induced other traders to place trades in otherwise illiquid option contracts.
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Who the f are Gu and Lee??
Need the ken and vlad arrests
12
These are small fries. I want the main course.
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Sir, would you like some FUCK THE SEC THIS IS RIDICULOUS with your NOTHINGBURGER? 😐
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What this says to me is that meme stocks are under close scrutiny and they accidentally caught some small fry. I think they are building a case against someone and have tipped their hand.
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I see charges, I upvote.
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This is good, but it's also just two florida men
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It's a start - but these seem like VERY small fish to what is really going on here. At least we have the SEC confirming Buy-Wash trades being used on so called "Meme stocks".
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Here's more information on the case from the SEC: https://www.sec.gov/litigation/complaints/2021/comp-pr2021-195.pdf
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They just took back the money he (the friend) made illegally? No jail or nothin’. So all he has to do is get better at hiding his illicit behavior. The SEC has just been training criminals all along. Perfecting them. Cool.
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This is pathetic - just a couple of kids. Who the fuck cares when the system is rotten. It’s almost an insult that they’ve gone after two nobody’s. This is beyond pathetic.
1
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I hate the SEC.
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Good old SEC.
Can always rely on them to focus on the big fish!
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Good job guys, the SEC did it! They found the criminals on Wall Street!
/s
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The problem with these two is thier crime equals only 700kish
If they were making billions they could then continue for years without an issue
The SEC's keeping the small fish and releasing the big fish back into the water.
That's exactly how organized crime operates.
SEC is basically just the mafia with a good disguise
The problem isn’t that they stole, it’s that they didn’t steal enough. When you steal enough that you can flip the whole board and ruin the game for everyone, that’s when lawmakers just pretend like you’re doing nothing wrong.
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and 75k in fines? so they only kept 90% of the gains
They've only fined the guy who made $50k. They haven't fined the guy who made $660k yet.