Same stuff goes down on 4chan and several other sites. Not to mention the fact that the SEC has neglected to investigate insider trading for years now.
IMHO why the fuck is shorting legal to begin with. Short insurance should be mandatory for short trading.
Scale dictates enforcement priorities, obviously. Like a lot of people, they don't deal with issues until they are large and impact the market. They are ABSOLUTELY going to intervene here. First with some immediate action, and later they'll craft a new rule to guide social media on stock advice being not allowed on their platforms (IMO).
> why the f** is shorting legal
Short selling rewards investors who believe that certain stocks are overvalued or that the company is covering up fraud. They helped bring Lehman Brothers down, as well as Enron, Wirecard, etc... In those instances, the shorts were instrumental in reverting stocks down to correct (sometimes zero) prices. Without them, bubbles would rise higher and poop much bigger. That sort of volatility destroys liquidity and confidence in the market.
> Short insurance should be mandatory for short trading.
There are naked short limits already, but yeah, this issue with GameStop should have those rules re-evaluated, because they obviously didn't work in this case.
> "First with some immediate action, and later they'll craft a new rule to guide social media on stock advice being not allowed on their platforms (IMO)."
Well, the IRS doesn't go after rich people because they don't have the funding[1]; they only go after the people they can afford to go after[2].
I know the IRS is different from the SEC, Apples to Oranges. But like you said, they've neglected insider trading; it's probably for very similar reasons, because those being investigated just have too much power to take down. I'm sure the SEC will hammer these easy targets on WSB well before they even dare touch the Big Boys.
You are correct that they cherry picked information. However you are still incorrect on the original assertion that SEC is not in fact neutered. There have been more enforcement actions but insider trading enforcement has been the lowest in decades:
Could you note any major cases the previous administration pursued that didn't involve some lone scapegoat trader and/or a minority everyone could agree to dislike? Were there any actual cases after the 2008 mortgage/cdo/cds crisis, for example?
I don't know why you're being voted down here. These are legitimate articles in major publications that are broadly accepted by experts in the field. Sad!
They are going to call the Reddit CEO and have wsb shut down under the threat of SEC enforcement actions.
Looks like the wsb discord is down.