SEC finds everything worked out well during Memestock madness, will seek to change everything anyway
It doesn’t take much to send Gary Gensler into a regulatory frenzy. And his Securities and Exchange Commission’s report on the March stock market madness certainly doesn’t give him much.
A long-awaited report from the Securities and Exchange Commission into hyperbolic trading in the troubled video game retailer and other stocks found that everything was largely working as it was supposed to.
The 45-page report, released on Monday, suggested no policy changes in response to intense GameStop trading and other little-considered actions that have soared in value, thanks in part to posters on Reddit and Twitter, where many are lurking. come together in the midst of a pandemic. amateur trade boom.
SEC staff found no evidence of hedge fund “naked shorting,” that is, shorting stocks that hadn’t been borrowed, as some posters claimed in line.
He also ruled out the possibility of players like Citadel Securities buying GameStop stock to hedge against call options they were writing themselves.
No matter! Gensler has had his eye on order flow payment, gamification, cryptocurrencies and everything else for months, and the fact that his own people saw that everything worked exactly as it should have done will only change nothing to that.
“It is worth considering whether game-like features and celebratory animations that are likely to create positive investor feedback encourage investors to trade more than they otherwise would,” the SEC said in the statement. Monday report.
“Our marketplaces have moved to zero commission, but that doesn’t mean it’s free. There is always a payment under these applications. And that doesn’t mean it’s always the best execution,” the SEC chief said on CNBC’s “Squawk on the Street…”
“We’ve had cases that we’ve announced over the last 18 months where there’s been this conflict between the broker on the one hand and this payment for order flow on the other,” Gensler added…. Gensler added Tuesday morning that the SEC is now turning its attention to short selling, settlement, disputes involving digital engagement practices and market structure. Then the commissioners will step in and the agency will release the recommendations for public comment, he said.
Perhaps he will take a page from the usually very limited playbook of German regulators, who don’t like what they see in their country’s second most valuable bank.
N26 said on Monday that the regulator, BaFin, had ordered it to limit new European customers to 70,000 per month….
Regulators have repeatedly found problems with N26’s internal controls, which banks are supposed to maintain as a front line defense against money laundering and other illegal activities…. In June, BaFin fined N26 4.25 million euros, or about $5 million, for failing to timely submit required documents that flag suspicious customer transactions, often a report to authorities. for illegal activity. In May, the agency asked the bank to strengthen its anti-money laundering controls and appointed a controller to oversee the process, an unusual step to ensure compliance.
SEC describes GameStop frenzy, but not what to do about it [NYT]
SEC debunks conspiracy theories about meme stock mania [Axios]
SEC’s GameStop report questions ‘game-like’ trading apps [WSJ]
SEC Chief Gensler Says Regulator Is Evaluating Future of Payment for Order Flow [CNBC]
German fintech N26, newly valued at $9 billion, attracts the attention of regulators again [WSJ]
Fintech N26 is now worth more than Germany’s second-largest bank [CNBC]
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