I don't think bailouts for the losers is as likely as punishments for the winners and confiscation of their winnings.
There is no rationale for a bailout because there is no systemic threat to the financial system. I think the feds will slow-play it by collecting information from trading companies like robin hood, and social media companies like reddit and twitter. They'll piece it together to find out who profited the most from it, and to find out who were the most vocal proponents of this trade. They'll look at banking records to see where that money went.
Eventually they will send the SEC after many of these people for securities violations, and allow them to plead out with their punishment being a fine for all the profits they made off of this trade. They'll try to get people for money laundering if they can. They'll keep a close eye on tax returns and send the IRS after them if they don't properly handle paying the taxes on their sudden windfall. They might issue a general warning to the public that finance/investment forums where coordination of pump & dump schemes is allowed to occur may be subject to criminal prosecution. They might even try to charge reddit with something to make an example out of them.
punishments for the winners and confiscation of their winnings.
You honestly think they would go after a few million reddit users for their legally gotten gains? That would further destroy wallstreet the likes of which would be unimaginable.
send the SEC after many of these people for securities violations
There are none.
They'll try to get people for money laundering
Are you just larping now?
You really are either delusional or misinformed if you think the financial establishment (which includes the SEC) will not do anything about this. They won’t go after every single person, but they’ll go after anyone who won big and make examples of them. That is what the sec does.
Your opinion about whether they should, whether they have the right to, or whether it would be fair, is completely irrelevant. All that matters is what the SEC thinks. Furthermore, these retail investors have zero training or experience backing them up and they do not have big law firms on retainer to defend them like wall street firms do. They are lambs to the slaughter.
Who do you think bullied robinhood into shutting down trading for gme and why?
I'm certainly not in the privy of these types of conversations. But I just can't fathom that. They're already tipping their hand with how this is being handled. That much and they are literally flipping their hand over on the table and saying they have something else.
I just don't see it as feasible.
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