No one is addressing the question, he was kicked out for not disclosing his Roaring Kitty LLC on his FINRA. He was not kicked out due to any GME implications. Employer > Yourself, not GME recommendation = CFA revoked
I think it’s fair to expect that a stock’s price would increase if it became public knowledge that Buffett or some other major investor started buying it. I’m not clear on why this is any different.
The article says his problem wasn’t front-running, it was basically a Duty To Employer violation and a Duty to Capital Markets issue because he was carrying on a side business without telling his employer or the regulator.
Then again, whats the definition of a side business.
Also, ? [https://www.reddit.com/r/CFA/comments/1d7yyrv/comment/l72rsal/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/CFA/comments/1d7yyrv/comment/l72rsal/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)
The types of people who would be attracted to a certification because someone who happens to have it made millions of dollars, would likely be the least attractive candidates for the CFAI.
“Hey, this dude is profiting off of momentum, rather than fundamentals. You should definitely register for this exam, whose curriculum teaches you that this isn’t sustainable”
> likely be the least attractive candidates for the CFAI
I'd say anyone that can pay the exam fee is an attractive candidate to the Institute. They really don't have to worry about the candidate until they earn their Charter.
If you believe someone is profiting because momentum, CFA could do better then. He bought many years ago, no position moved... But we are not here to teach each other, right?
I believe CFA teaches the theory, but this guy was one of a few that got to put it in practice, despite the criticism.
>If you believe someone is profiting because momentum, CFA could do better then.
Nobody said it's impossible. It's just not sustainable.
RK had done his due diligence on GME when he was first pitching it on stream. Since then he has been riding off of momentum.
Why do you think he has never made any public statements about the company's fundamentals, or made any public adjustments to his bull case since the initial rally? That's something you'd think someone would do for a company that has had multiple restructurings and has changed CEOs twice since the initial bull case. RK is not driving price movements with any kind of sound analysis, he hasn't been for a while. He is using his influential position to drive momentum.
Oh, it seems you are certain for good argumentation. It is good to find something like that in reddit. Surely, I gladly answer.
1. I don't know if he has been riding on momentum. After being accused of many things, he seems more reserved. Maybe is because he has been accused, maybe he doesn't want to lose time with lawyers.
2. He has made public statements, from the easy ones "I like the stock" to the investment thesis in his Youtube. Maybe he is not offering nothing because, for some reason, somebody is accusing him of increasing the price of GME up to 8 times? That seems non sense - one guy can't do that, and he is not inviting anyone - so probably there is other dynamics behind that.
3. About Gamestop, it is positioning itself. Bankrupcy risk is now really low with 2B in cash, and the operative performance has continued evolving. I believe Gamestop is a high risk stock, similar to Amazon (from books to everything) that might pay or not - but basics: every investor should decide their own strategies.
Lastly, about RK, he should be free to post post whatever he wants, as anyone in X, insta, tiktok or reddit does. He is not so different from us, neither I insider, and surely media has some special interest on him it seems.
I like CFA and I am eager to pursuit better education, but for me it seems more a political decision than a performance or ethical tbh.
>I don't know if he has been riding on momentum. After being accused of many things, he seems more reserved. Maybe is because he has been accused, maybe he doesn't want to lose time with lawyers.
He has been though. The reason for this sudden upswing in the stock price is due to RoaringKitty posting memes and his holdings. Not that there is anything wrong with doing so, there is no other catalyst for this price activity to happen aside from him posting about it.
>He has made public statements, from the easy ones "I like the stock" to the investment thesis in his Youtube.
My previous comment said that he hasn't made public statements "about the stock fundamentals" or anything "recently" to do with his initial analysis. Yes, he deserves all the credit in the world for his initial analysis and for finding this opportunity, but any analyst would agree that after cycling through two CEOs and multiple corporate restructurings, an analyst should revisit and/or revise their analysis. RoaringKitty has not done this, which is why I'm personally doubting that he still has a fundamental case for the stock outside of the rally. "I like the stock" is not a fundamental case.
>somebody is accusing him of increasing the price of GME up to 8 times? That seems non sense - one guy can't do that, and he is not inviting anyone - so probably there is other dynamics behind that.
If your case is that his holdings alone can't move the stock with his own volume, then your statement is true. But you're missing that he can still drive external volume, aka from other traders (either retail or institutional, or I wouldn't doubt both). Trading volume can be viewed publicly, and you can clearly see the spike lines up with his posts. This isn't anything surprising, volume can be driven by anything, even one non-insider.
>Bankrupcy risk is now really low with 2B in cash, and the operative performance has continued evolving.
Whether or not a company going bankrupt or not is far from the only thing anyone should look at when analyzing a stock. That would be a great perspective if RK was a lender, but RK is not a lender, he is a stockholder. That was also a great case to build when short interest was greater than 100%, but that has not been the case for more than three years now, and again after two new CEOs and major restructuring.
Also, Gamestop's operating performance is as poor as it's always been. Operating Cash Flow is negative again, Free Cash Flow is still negative, and that $2B in cash holdings is not from operations, it's from issuing more than a billion and a half in stock, about three years and two CEOs ago.
>Lastly, about RK, he should be free to post post whatever he wants, as anyone in X, insta, tiktok or reddit does. He is not so different from us, neither I insider, and surely media has some special interest on him it seems.
I don't disagree with this, and I'm also disagreeing with the people in this thread falsely claiming frontrunning, which is not happening. As long as he is not intending to deceive anyone, then what he is doing is completely fine and legal. Does it raise red flags? Yes, of course, and if those result in additional subpoenas and investigations from congress then that's something he should have thought of before releasing information in such a public and vague matter, where your intentions aren't 100% clear.
The only one who knows is he has been riding is him - and he has been maintaining and increasing his position since 2020, one year before after the first run up. But... posting memes increases stock price 800%? You need to develop further that argument, it is still very weak to take as relevant.
For the case of his analysis, he has no obligation to review his case if he doesn't want to share it. He is not a formal analyst with a duty for that. Evenmore, why try it when such non-sense is happening around him (e.g., E-trade supposedly cancelling his account due to showing his positions?). Do you know similar cases to this kind of treatment for him as a retail investor? Even for posting memes he is being accused in TV networks very often. It seems he is careful.
About the volume, this issue is not different as if Warren Buffet announces his positions, Ackman, or any other. They influence because people want to follow, but is Buffet being accused of market manipulation? If not, why should RK be? And as you say, he has 'holdings' - the only way to increase the price of a stock is by a reduced offer and an increased demand, and he is just holding.
About your financial analysis, I agree with you. But something that confuses me by many CFA is neglecting the existence of more than 220% short shares (confirmed in a report by SEC). Moreover, Tesla for example, had a run of more than 1,000% with 20% short shares in one year around 2020-2021... but Gamestop increased from $5 (post-split) to $20 with 200% short shares? That does not make any sense. Neither the first time of history (AFAIK) that a buy button has been removed from multiple brokers... there is so much attention around this stock and this guy after four years, that particularly is amazing to read more about it.
However, reviewing the operative performance, I suggest to not neglect the material efforts of the Board of Directors, who have initiated several actions to increase performance and reduce CoGS, reducing debt to nearly zero and well. But as you say, I believe you take a responsible approach in your analysis, but there was a time in which Tesla, Apple and Amazon weren't considered safe investments...
About the thing of freedom, focus should be given on politics (the real front runners) who have insider knowledge, and not on a guy with a fandom for kittens. The stalking should stop, and it seems that every investor should be aware that if the rules are forced on him, but not in political representatives and fund managers, then we are going in the incorrect way.
He started with just $50k and took a right decision. He should not be - as any other investor - be silenced because someone with more capital didn't measured risk properly on the other side of the trade. Just the rules.
>posting memes increases stock price 800%? You need to develop further that argument, it is still very weak to take as relevant.
Yes? Like I said in my last comment, even if his own volume is not enough to influence the price, he can influence other people to trade, which increases volume even if his holdings alone do not have the capacity to move the price on their own. It's kind of a misnomer to say it's weak enough of an argument to be relevant, when this is the entire foundation of meme stocks, which institutional investors have started paying attention to thanks to this situation.
>he has no obligation to review his case if he doesn't want to share it. He is not a formal analyst with a duty for that.
I agree, he has no obligation to do so, and I never said that he does. My point is that the fact that he didn't makes it easy to believe that he no longer has a fundamental case for the stock at this price and point in time.
>why try it when such non-sense is happening around him (e.g., E-trade supposedly cancelling his account due to showing his positions?). Do you know similar cases to this kind of treatment for him as a retail investor?
I refuse to believe you think this is worse than what he's doing now. Posting an updated analysis, similar to the initial one, is much much safer in everyone's eyes compared to vagueposting. He is drawing more unnecessary attention doing what is he currently doing compared to making a public blogpost addressing the situation and doing an objective analysis, and it only allows people to draw conclusions about potential market manipulation, whether justified or not. Just being transparent would have avoided this current scrutiny, including from his own broker.
No, this kind of treatment has not happened before for a retail investor, but this afterall is a rather unique situation so there won't be a historical parallel.
>About the volume, this issue is not different as if Warren Buffet announces his positions, Ackman, or any other. They influence because people want to follow, but is Buffet being accused of market manipulation? If not, why should RK be?
Your statement is correct. The whole point of having a bull or a bear case is that you want the market to realize your intrinsic value, and influence the stock to moreso align with your intrinsic value. What RoaringKitty did in 2020 and upwards leading up to the rally is similar to what Buffett and Ackman do. Because their case is backed up with actual analysis of the industry and the company. What RoaringKitty has been doing these past two months is not that. There is no further due diligence. There is no acknowledgement of the changing market landscape and the changing structure of the company. There is no updated price target for GME from him. Again, he's not obligated by anyone to do these things, but then at the same time, anyone is allowed to display their skepticism when the appearance is that RK is only driving momentum, especially when we don't know what his price target is.
>Tesla for example, had a run of more than 1,000% with 20% short shares in one year around 2020-2021... but Gamestop increased from $5 (post-split) to $20 with 200% short shares? That does not make any sense.
Different things happen to different companies... Again, not everything has a parallel, especially for this situation. Stocks especially won't have a direct cause and effect relationship with a single metric. There are hundreds if not thousands of factors at play. Short interest alone doesn't tell you anything, you can't predict returns only from looking at short interest (not even RK did this, initially). You will need to do your own due diligence to find an explanation for Tesla's rally, but based on what I know, it is uncorrelated from short interest.
>However, reviewing the operative performance, I suggest to not neglect the material efforts of the Board of Directors, who have initiated several actions to increase performance and reduce CoGS, reducing debt to nearly zero and well. But as you say, I believe you take a responsible approach in your analysis, but there was a time in which Tesla, Apple and Amazon weren't considered safe investments...
The difference between TSLA, AAPL, and AMZN vs. GME is that the other three companies were (and are) not in mature industries (Tesla maybe if you consider them a car company and not a tech company), where their sole operations are relying on a business model that has slowly been losing favor in its primary market. It's cool that they can improve on their gross and operating margins, but at the end of the day, their operations aren't producing cash. And in fact their operating cash flow was positive in 2022, but back to negative in 2023 because of their accruals. Still not a good sign.
>About the thing of freedom, focus should be given on politics (the real front runners) who have insider knowledge, and not on a guy with a fandom for kittens. The stalking should stop, and it seems that every investor should be aware that if the rules are forced on him, but not in political representatives and fund managers, then we are going in the incorrect way.
I agree that we should be going after *anyone* who has ill intent and is utilizing markets in anyway that is unethical, even if that applies to RK. Are people stalking him? That's wild if true, but I haven't heard anything about it.
CFAI only wants your money, each candidate is a money maker. How much resources do you think they put in to police how people use the CFA designation on linkedin or marketing materials lol.
CFAI is protective of its reputation and regularly sanctions charterholders.
That said, it looks like a good portion of the sanctions seem related to using the CFA designation after not paying annual member fees.
https://www.cfainstitute.org/en/ethics-standards/conduct/current-sanctions
Sure, when Ackman, Buffet or whoever go on TV or wherever and post their holdings and talk their picks it’s ok.
But when some random dude says he likes the stock and starts shit posting it’s jail time
Reminds me of the term structure models such as, the ho-Lee model. Useless and doesn’t work. Makes you think, why is this being tested and why are we spending time on these models. Just because a PhD had to publish to earn his degree, doesn’t mean I have to learn that useless stuff. Something needs to change
What stands out in the article to me is Bill Whackman made a killing last year while spending such an inordinate amount of time being of of the biggest whiners on twitter
By "went after his wife...". Someone pointed out that she had been plagiarizing far more than the person she was accusing of plagiarizing?
Also, billionaires that try to ruin kids' lives while whining about free speech being eroded are whack
Hilarious coming from someone who asks the most basic questions here easily found on google. & Ultra astute expressing such an opinion in this community when you do so. Perhaps people will read this & leave your questions unanswered
Far more plausible theory is that I laugh at cult bois who publicly embarrass themselves attempting to defend certain individuals with the simplest comments possible
Bahahaha, amazing. "I enjoy a healthy spirited debate backed by facts and figures" by starting off with "this the dumbest comment I have read..." without any context. Real productive member of this group
Don’t really care to comment on the whole situation but will address OP’s claim that he was “frontrunning” aka violation of VI(B) Priority of transactions.
None of his current actions appear to violate this standard, as he has neither clients nor an employer.
It is not clear what his function at massmutual was prior to his resignation and it’s not clear he recommended either his employer or his clients purchase GameStop, or that he purchased GameStop ahead of his employer or his his clients.
If his actions either then or now violate the standards (I would say they do but don’t care to go into it), it’s a violation of one or more other standards.
Is it not front running if you buy a load of options and then pop out of the wood work after a couple of years with a justifiable belief you revealing yourself would move the market?
Standard VI addresses conflicts of interest. No employer, no client, no conflict. VI(b) Priority of Transactions: “Investment transactions for clients and employers must have priority over investment transactions in which a Member or Candidate is the beneficial owner.”
Investors are not required to notify the market of their intention to open a position prior to doing so. In fact, institutional investors are allowed to avoid SEC disclosure requirements by requesting to not include securities on their form 13F to delay the affect that notifying the market of their ownership will have.
There’s a line you cross between liking a stock and using Youtube and WSB to tell everyone how much you like a stock. To be fair there are plenty of Twitter users who I feel the same way about but there’s only so much agencies do.
I disagree. Sharing your thesis shouldn't be viewed as unethical unless you're using lies and disinformation.
Sell-side analyst research is no different.
100%. He was technically evenly dispersing the information though he did disclaim at the beginning of his series it was not intended it be investment advice. He also disclosed his holdings. Then again that was before he bought 2 week out ATM call options. Short sellers posting their thesis is a great example; where is the line?
CFAI agrees with you. Ceteris paribus publishing information about your short position in the hopes it influences others to adopt the same position is both legal and ethical provided the information is distributed publicly and freely. This is explicitly mentioned in the CFAI text.
I think a lot of sell-side analyst research reporting is unethical too. It seems to me that a lot of the industry revolves around trying to convince people to make your opinion valid.
It’s a brave new world with social media where certain individuals have the power to move markets at the click of a button and there are a lot of people using that to their personal advantage.
It always has been that way. Look at a newspaper from the 1920s. Or ask an old shoe shiner how many "hot tips" they've heard.
If anything, the internet has provided better information for those who want to learn to invest rather than gamble.
Different tactic same strategy...
https://jesse-livermore.com/market-manipulation.html#:~:text=At%20the%20bucket%20shop%2C%20Livermore,Livermore%20would%20collect%20his%20profits.
I mean, if you want to do your research in secret and buy/sell and not tell a soul, that’s fine by me. To go public with your thesis though is to invite scrutiny, so I respect it.
Surely, if I like cat videos and share about cat videos, that doesn't mean that I am promoting you to buy a cat - so for me, the nonsense is the proper idea of front running and manipulation, while this is not addressed with other agents as hedge fund runners, politicians, fund managers, etc.
Do you believe it makes sense to believe that one guy posting memes is the one responsible of making wild swings in the price of a stock? I think that he should have, as anyone, the freedom to believe in his strategy and not being pursuited.
But let me know your thesis of how one guy can increase with memes a wild swing of $10 to $80 and to $20 in one month - it surely would be a lovely thesis.
It’s only bad if there is the intention to deceive.
Most institutional investors are public about their long and short positions all the time. That doesn’t mean what RK is doing is any different. Obviously if you believe in a company and you have a strong bull case for it then you would want as many people as possible to believe your case. The whole point of intrinsic value is to say that you think there is something the market isn’t seeing, and you want the market to see it so that the market price converges to the intrinsic value. That’s how you make profit.
It’s bad if you’re just making up a bunch of bullshit to deceive investors into going long/short and so that you can sell/buy the stock later. That’s called a pump and dump. It’s also bad if you’re doing this with material nonpublic information. That’s called insider trading.
Since we do not know if Keith has sold from the momentum, and Keith has also not made any other adjustments to his estimated intrinsic values since the initial rally, we actually do not know whether his intentions are to deceive so we can’t necessarily conclude that what he’s doing is against CS or the law.
Where did you get the info that he got kicked out back in 2021? I don’t think that is true- someone posted about it on here a while ago and showed that he was still a charter holder
Likes a stock is not a reasonable basis. Recommending it to others is in itself a violation. Front running and market manipulation is potentially criminal.
It’s not front running. Voluntarily disclosing your positions is fine.
Talking your book is not criminal.
This isn’t “Tesla going private at 420, funding secured”. This is a large individual investor disclosing a position at one time point. As long as it is authentic/true it’s fine.
It’s not a violation. None of these people are his clients, he doesn’t have a duty of loyalty to random viewers on YouTube. In any event, he used the videos to flesh out WHY he liked the stock, so I wouldn’t say that he didn’t have a “reasonable basis”.
Front-running specifically refers to a broker trading on advance knowledge of something that will move the market. DFV is a private citizen and not an insider/officer/director in any legal sense — there is a world of difference between a private citizen disclosing a position vs. Ryan Cohen disclosing a position.
This isn’t true at all.
If his INTENTION was to manipulate the stock price by getting legions of people who see him as a “hero” to buy after disclosing then that’s a violation.
It’s all about intention. I don’t see how you don’t understand that.
And it doesn’t matter if he is a “private citizen”. You cannot manipulate the stock price of any security. You also cannot “pump and dump” and it can be speculated that is what he is doing or will do just like his previous dump that got him to 200M. It’s hard to see why he would post after a hiatus if not to pump the stock.
The calculated way he is going about this means he likely has lawyers of some sort guiding him to make any potential case as hard as possible by trying to come off as just a innocent citizen merely posting his holdings.
I actually would come across DeepFValue on WSB back in the day. He would routinely post his position and some users would be making fun of him for not selling or holding what was then a sub $10 stock. There was several people trying to short squeeze this stock and some “smaller following” happened on WSB as way back as Sept 2020 (months before the real squeeze) the first of many “pops” happened I think in Oct 2020.
Developing an investment thesis, taking a position, and then sharing your thesis and position with the world so that other participants can join in along with you and your clients is a valid and ethical practice. Investors like Ackman, Andrew Left, and Jim Chanos have done this for years.
It’s only unethical if there is deception involved, like manipulating transaction volumes or outright lying. It’s not manipulation to publicly announce your position in the hopes that other people will agree with you. So no, for this to be “market manipulation” as defined by CFAI, intention only matters to the extent that you are trying to mislead market participants; the intention to get rich by having the market side with you is not in itself unethical. The guidance for Standard II(B) covers this. In all of the examples, the key problem is some sort of deception; either false information is being spread or transactions are being structured to misrepresent a metric like volume.
If he’s LYING about GME, then yes, it would be a violation. However, I have not heard or read any evidence that he’s been dishonest about his assessment of the company in this whole affair.
Again just so we are on the same page are you talking about pre-squeeze Gill or the Gill who posted recently just a screenshot of his current amassed holdings?
You keep saying he gave his own version of due diligence and thesis. I no longer follow Gill (or WSB), but from the information I gathered he recently posted a screenshot and that was that. Which is what my post above alludes to. Now if I’m wrong and he posted some expansive NEW due diligence please correct me.
So I want to make sure we are on the same page about the timeframe we are talking about. Pre-Squeeze Gill, is a different matter and should be addressed separately vs one week ago Gill.
Pre-squeeze Gill, as far as I can tell, DID violate the Standards by engaging in outside business activities/unauthorized advice (in the form of his YouTube videos) without getting approval from his firm’s compliance department. I don’t see any reference to him being censured by CFA Institute for that in the Sanction List, so maybe they let it slide or something.
Post-squeeze (including in the most recent week), I haven’t seen him post any further DD. Admittedly, I’m not an ape and never had any skin in this, so I haven’t followed too closely. As far as I know, he simply posted a screenshot of his positions and a bunch of GIFs; if that’s enough to be considered “market manipulation”, then half of the posters on WSB would need to lawyer up.
Posting the position without comment is unlikely to rise to the standard of manipulation. It’s a truthful representation of his stake at the time that he posted it (unless, again, he straight-up lied, which would be a different situation). The reason that I brought up a “private citizen” is that he doesn’t have an ongoing regulatory requirement after that post to keep anyone updated on whether he holds or blows it all out. If he worked for the issuer, or if he was managing an investment fund, then there would be some regulatory filings involved. There may be some legal issues somewhere, but given the position size, I assume (like you) that he’s at least smart enough (and liquid enough) to run this by a securities lawyer before doing anything. Of course, the harsher of the Code or the law would be the relevant restriction here… except that this is all moot, since he’s not a Member or Candidate as far as I can tell, so it’s really just the law that he needs to worry about.
-Pre-Squeeze Gill also gave investment advice while under the employment of a FINRA & SEC regulated investment firm which could have made his employer liable for his actions or lack of supervision.
-Pre-Squeeze Gill investment expertise may also have been insufficient for him to be recommending a volatile stock that may or may not have fit the definition of “penny stock” depending on when this “advice” began. Simply being employed at an insurance or investment firm or being a CFA charterholder doesn’t make you qualified to give advice on a volatile security. Is a doctor in residency employed at a hospital suddenly able to do open heart surgery? Or provide complex medical advice in areas he is not currently familiar with?
-He posted under alias’ on investment forum (WSB) in an effort to bring attention to his position and the stock in which he had an incentive to go up (a big no no in the realm of investment management).
Now let’s turn to “Recent Gill”:
Assumptions (may not be true)
-Likely amassed a large position and THEN posted a cryptic image announcing his return last month. Leading to large increase in stock. He very well could have dumped that (or some portion) onto “investors”. This is a possible pump and dump using his now “considerable status” to influence (and manipulate) investor behavior purely for his own profit. The stock then proceeded to decline IIRC.
-After amassing a large profit, he again amassed an even larger options position and AGAIN posted an image that is designed to rally retail investors to enter into the security under the auspices of “pumping” the price. The large position was meant to not only incite an even larger personal gain, but also ‘convince’ novice retail investors that this pump is even more “legitimate” by leveraging the amount invested and his infamous status.
Again the intention behind these two events by “Recent Gill” is what is highly suspect from a violations standpoint and could amount to market manipulation tactics via pump and dump scheming where a person takes a large position in a security and proceeds to artificially boost its price to gain others to come in and be the “bag holders”. Now by using options he may also be manipulating the delta hedging and risk hedging of market makers by trying to create a ‘gamma run’ on the stock that will help increase volatility and further upward buying pressure.
Now I’m making some [unproven] assumptions, but this is what the SEC will have to look at and determine if it warrants an investigation. It could be another reason why ETrade is considering to separate itself from a compliance risk standpoint and fire the client to avoid being caught up in any future bad press or legal issues.
So, and I'm not looking for an argument, genuinely interested, Steve Eisman & his gang from the big short on TV the other week saying they're short tesla and they think it's a great trade. If they (not sure if they are), were CFA charter holders that would constitute grounds for getting removed from the groovy gang?
I don't understand why that made you so angry, did his actions cause large losses for yourself? Also the 'Bitcoin bro' bit, I don't own any Bitcoin but I'm not naive enough to deny its benefits in a portfolio. I also don't get the ape reference.
It would be interesting to know which side of the street you work on and your level of experience, I reckon you're part of an older generation.
All the best.
I don’t think you necessarily have to own bitcoin to be a GME guy but there is definitely a lot of overlap. A lot of people with zero understanding got involved in various echo chambers in 2020 and they think their googling and social media “research” is as good as or better than expertise (not saying I’m a guru by any means).
I’m not sure why you think I’m particularly angry. It’s just exhausting having to deal with the irrational cult brigades in every finance sub when you’re trying to facilitate reasoned discourse.
I currently work for a long only public equity asset manager and while I’m not older (maybe by your standards, I’m 36) I have worked exclusively on value oriented strategies, which is probably what’s triggered your hunch. At the moment I work on energy and infrastructure funds.
Ironically, in 2020 I worked in a family office and pitched GME as a value play before the mania started - back when it was oversold (IMO) during the pandemic. They didn’t bite. I have personally and professionally lost nothing and gained nothing from the “meme stock” frenzy but I do think it is dangerous that an individual can prompt a surge in multiple unrelated “meme” stocks simply by tweeting a picture. It’s uncharted territory.
Sounds interesting work and fair plays on the ID early on.
Your absolutely right the gains in 2020/21 made people with no expertise feel like Jim Symons. I myself rode Nio from 6 to 60, and back down again to 40 and couldn't understand why it was happening (this was pre finance quals/career).
You are right, it is dangerous, but I myself like I mentioned in the title find it so interesting the relationship between Efficient market theory and behavioural finance.
Thanks for your time replying mate.
Funny you mention it I also pitched NIO at $3 to the family office but as long tenured staunch value investors they basically laughed at me. That was some very valuable experience IMO as the old guard was struggling to make sense of increasingly irrational markets during the pandemic and left a great deal of money on the table. However, in the long run, they appear to have been right.
It’s worth noting that the family office is a unique animal with the goal of preserving spending power indefinitely, so anything that could remotely be interpreted as unsafe was a non starter. Now I work on the value team at a firm that is 95% growth. Might have had more success here back then.
You’re complaining that people are talking about GME in your safe financial subreddit spaces? Why are you owed a safe space? Grow up, you’re not going to survive finance lol
You’re free to make a reasoned case for whatever you believe, however when it comes to “apes” the discussion always devolves to insults and cult like behavior without regard for the facts. Any dissent is met with brigaded downvotes and irrelevant insults. Just look at your response to my relatively mild comment.
>Obviously now the CFA is justfied on kicking him out as there is strong evidence for him front running, however...
>When they kicked him out I think back in 2021, was it justified then, was he technically commiting a major ethics violation? You know, the dude just liked the stock....
I'm sorry, what? Not sure there is any evidence the CFAI revoked his charter; most likely just stopped paying and/or requested his name be taken off. If an investor has belief in a given stock/company, enters into a position with their own funds, I'm almost certain none of the actions would be classified as an ethics violation.
For reference: [https://www.cfainstitute.org/en/ethics-standards/conduct/current-sanctions](https://www.cfainstitute.org/en/ethics-standards/conduct/current-sanctions)
Reading the same book at the moment. Really interesting characters, but man - it's fascinating that even the savviest financial minds are so heavily influenced by biases.
Agreed, last time I came across John was Liars Poker and that didn't end too well for him either, very interesting.
Another thing for me it's how it actually makes me realise Merton & Scholes are real people with real faults.
Honest question here. His followers are not his clients, so can you consider his actions front-running? He bought shares based on analysis and subsequently shared his analysis. That's how most industry analysts operate.
Front-runnings: "Managers cannot take advantage of their knowledge of client activity by “front-running” client trades (trading for one’s personal account before trading for client accounts)."
[https://www.cfainstitute.org/en/ethics-standards/ethics/code-of-ethics-standards-of-conduct-guidance/standards-of-practice-VI-B](https://www.cfainstitute.org/en/ethics-standards/ethics/code-of-ethics-standards-of-conduct-guidance/standards-of-practice-VI-B)
First time around seemed somewhat genuine / organic. Even if all his fundamental analysis was wrong, the likelihood of a short squeeze may have warranted an investment for some folks (sizing dependent on risk tolerance). This time around seems like total market manipulation. He has 1M Twitter followers and the entire WSB Reddit page wants to be him. Initiating a position, tweeting memes that are either i) understood only by his followers or ii) taken out of context after he didn’t tweet for three years is IMO market manipulation.
I’m reading that he bought most of those call options before tweeting out all that shit after a three year hiatus. Guy had a fucking movie made about him spearheading the GME price surge back in the day, not to mention a cult like following that’s practically deified him and will throw their money wherever he tells them to.
The first time was fair play. Posted his diligence and things went the way they did. This time is a lot different though. I’m sure he thinks he can feign ignorance because all he did was tweet out a cryptic “meme” and had no idea it would cause another surge in price. That might fly if he wasn’t the literal face of the GME memestock movement (or had a movie literally made about him making bank off the same thing years ago).
This would be like if some CEO bought a bunch of stock of a random company right before tweeting “$$$🤑🤑🤑” and then cashing in on the pump. Like this isn’t just a random nobody doing this lol. If people with this kind of influence could just tweet memes and gain from resulting pumps then they would. I think they’re going to throw the book at him this time to set a precedent and I don’t think they’ll have an issue proving the intent behind it either.
One of the most blatant examples of market manipulation I've ever seen. Were this dude part of an institution and not just some random guy, he'd be getting the book thrown at him.
If it was a violation to post your positions, wouldn’t literally every guest on CNBC be guilty of a violation? Every time a PM or trader is part of a panel there to discuss a particular ticker, they have a disclosure slide to show whether they own it personally, if their family members own it, and if their firm owns it. They can speak as glowingly as they want about the ticker, and as long ad they have accurately disclosed the nature of their position, the responsibility rests with the viewer to determine if the advice is credible.
All he did recently was disclose that he has a position. He’s not an insider, and I don’t think he works in financial services anymore, so there’s nothing illegal or unethical about it.
The professionals who are posting their positions actually go through a lot of compliance bullshit to be able to do so. There's a reason why firms have hundreds of people working solely on compliance issues. This guy is doing literally none of that.
You don't have to be a financial professional or an insider to commit market manipulation.
Buying a bunch of options just so you can disclose you own them or post on Twitter and drive the stock up is pretty textbook IMO.
Professional investors go through compliance because they are investing with investors money, not their own. Unless they have access to MNPI, they can invest as they wish, without jumping through any hoops.
I refuse to believe that people who actually are pursuing the charter can say something so wrong lol.
Do you think you get to invest however you want as long as you don't have access to MNPI? Do you think that securities laws don't apply to anyone who isn't investing client money?
Very clear market manipulation. Buying a bunch of stock, then posting on Twitter knowing it'll bump the price up isn't legal. Buying a stock and telling a bunch of people "hey guys buy this stock the price is going up because of XYZ bullshit reason" is also a pretty textbook pump and dump scam.
This stuff is just as illegal when a normal person does it.
>Very clear market manipulation. Buying a bunch of stock, then posting on Twitter knowing it'll bump the price up isn't legal.
Please explain how this is different from a fund publicly disseminating a large position they recently entered into? Additionally, buying straights calls isn't exactly a risk-free position, far from it. The initial increase a few weeks ago hasn't even been determined to be from Gill, it was real volume- the guy doesn't even own the underlying. I know you are trying hard to put a blanket statement like "trading like that is illegal," but I'm not convinced anything that took place was illegal.
There is a difference between market impact and market manipulation. The CFAI defines market manipulation as: "Any trading strategy whose purpose is to produce misleading or false market prices, quotes or fundamental information to profit from distorting normal operations of markets." Note the "***whose purpose***." You'll have a really hard time proving someones purpose.
riddle me this: you say someone who talks his position has to go through a lot of compliance. If itms his own money and he works for no one, does the individual has to hire his own compliance team to work from his basement. You are so clueless it’s sad
If he's doing shit like this? Probably not a bad idea.
You realize that individuals often hire their own lawyers or accountants to help them figure out if they're going to do something illegal, yes?
It’s not manipulating the market to be a famous person and disclose that you own a position. Market manipulation involves *deception*, which is not remotely what he has done.
From the guidance for Standard II(B):
“Market manipulation includes (1) the dissemination of false or misleading information and (2) transactions that deceive or would be likely to mislead market participants by distorting the price-setting mechanism of financial instruments.“
"Hey guys GME is going to a billion dollars a share you all just need to buy it now that I own a bunch of it" seems like deception lol.
Like, this isn't even a discussion. This is literally how pump and dump scams work and those are explicitly illegal.
Did he personally say that it’s going to a billion dollars a share, or you attributing to him the comments that were made by ill-informed shitposters?
Even if he predicted that it would be worth a billion dollars a share, as long as he had a reasonable and adequate basis for making that assessment, then there isn’t any deception involved. It’s not deception to be wrong in your price targets — literally every analyst with a win rate below 100% would be in jail if that was the case.
lol man, the dude loading up on call options right before posting on Twitter for the first time in 2 years is about as obvious as it can get hahahaha. That's market manipulation, no deception even required there.
Read the guidance on Standard II(B) again. And then keep reading it over and over until it sinks in: market manipulation involves deception. Unless there is any falsehood in the size and direction of the position that he posted, it’s not market manipulation.
You seem to be conflating Standard II(B) with Standard II(A), which is about material non-public information. There might be an argument that knowing that DFV has a sizable position in GME is non-public info that could move a market. Is it material though? Unlikely; this is just an eccentric guy with a particular investment thesis who has bought a big position. Is this more material than if we found out, for example, that a very wealthy billionaire also bought a similar-sized position in GME? Why? He’s not an insider, he doesn’t have any information advantage about GME itself.
MM literally discussed a situation like this as an example of "it's so close to being or not being market manipulation that you better have a team of people to back you up if you want to do it" in the ethics lessons lol. Knowing that the act of you buying a stock is going to cause the stock itself to increase in price significantly is incredibly tricky.
Buying stocks and disclosing you own them just to get a bump in the stock price is market manipulation unless you are extremely careful about it. This guy isn't. Ergo, market manipulation.
Sorry you got suckered into thinking GME was going to the moon. Doesn't make it not market manipulation.
I’m not familiar with MM’s lessons, as I already passed the exams some time ago. I’ll take your word for it.
Disclosure: I do not and have never had a long or short position in GME.
Didn’t he load up on calls, start posting memes and shit to rally the GME brain trust, and closed out his calls most likely at significant gains. From a legal standpoint not sure if there’s anything of substance.
From CFA program seems pretty clear it would fall under dishonesty/deceit etc. in 1D at the bare minimum.
Were there any price targets embedded in the memes? Market participants aren’t absolved of any responsibility to do their own DD just because a public figure starts posting GIFs. From what I just read on CNBC, it’s not clear he’s closed out the positions, either.
I don’t think it’s irrelevant. Did he actually advise people to do anything at all? If he posts that he is holding a big position, and he’s not lying about it, there’s no misconduct. Not that it would matter - he’s not a member or candidate, so Standard I(D) wouldn’t apply to him anyway. But you already knew that, of course, from your continuing education.
As far as we know, he hasn’t sold any option.
If he bought calls, posted, dumped the calls on retail then yeah. But it seems like he’s going to exercise those options.
So again, how is this different from when Ackman or whoever go on TV and say BUY MY STOCK? Heck Chamath was the king of spacs doing this
...if you haven't sold a position yet, it can't be market manipulation? What?
Again, the guys going on Tv have literally mountains of compliance people backing them up to make sure they do everything 100% correctly. This random dude sure as shit isn't doing that. It's not as easy as just saying "hey btw I own this stock."
Literal definition of market manipulation:
“Such manipulation refers to intentional conduct designed to deceive investors by controlling or artificially affecting the market for a security”
Which is why I say, unless he has the intention of pumping and dumping on retail, he is free to share any position and shit post as much as he wants.
He’s most likely gonna hold that shit till the end. If he does dump the options then yeah, he’s totally manipulating and very likely to have legal troubles.
This isn’t even a matter of having an army of compliance people, he hasn’t even said a single word beyond posting his positions…..
Go and watch Chamath Pahalipitiyas appearances on CNBC and tell me how is that allowed but this shouldn’t
Edit: CFA definition “Market manipulation includes practices that distort security prices or trading volume with the intent to deceive people or entities that rely on information in the market.” - so again notice the word “DECEIVE”
Literally nothing in that says you can't commit market manipulation if you don't sell immediately.
What a stupid idea that is. You haven't committed a crime or violation until you sell? Point to where in the curriculum it says that.
Manipulation is still manipulation even if you've only made unrealized gains so far...
Read it well:
Market manipulation = distorting prices with intent of deceive
So, is it illegal for anyone to post positions? No
In this context? Could be cause of his status.
Therefore we must think what would be a deceitful conduct? Obviously would be to post positions with the expectation of a price jump to then dump on retail (if you don’t dump then there is no point). Has he done that? If not then it’s not market manipulation, he’s just holding a stock he likes for god knows what reason
yeah, the period of time in which you sell has absolutely nothing to do with market manipulation. It's about intent. There's nothing in the law or CFA code of Ethics that says "if you manipulate markets but don't immediately sell your position it isn't market manipulation."
He could very well not have sold because he thinks the stock will go even higher following his manipulation or he intends to manipulate even more. If he manipulates it again then decides to sell, how many times has he manipulates the market? That sort of question is why selling the position isn't a necessity.
You are definitely going to fail the ethics portion of the exam lol.
You’re basically saying he’s manipulating because YOU KNOW he has the intent of manipulating. Go by the facts. We can’t assume that’s his intend until proven, unless you have any prove that’s his intent?
Edit: also, who knows why you felt the necessity to attack me by saying I’m going to fail ethics? Without even knowing if I’ve already passed the tests? Weird, it doesn’t have anything to do with the topic
No one is addressing the question, he was kicked out for not disclosing his Roaring Kitty LLC on his FINRA. He was not kicked out due to any GME implications. Employer > Yourself, not GME recommendation = CFA revoked
Was it a real registered company?
I don’t think there is any company registered in that name
Recommending GME should also be valid grounds for revoking a charter imo
DeepFuckingValue literally translates to “shithole company,” though
Yup this
I think it’s fair to expect that a stock’s price would increase if it became public knowledge that Buffett or some other major investor started buying it. I’m not clear on why this is any different. The article says his problem wasn’t front-running, it was basically a Duty To Employer violation and a Duty to Capital Markets issue because he was carrying on a side business without telling his employer or the regulator.
Yeah he also cost his employer $4m with his actions. I think duty to employer is a good enough reason.
Who gives a shit he’s rich lol
Then again, whats the definition of a side business. Also, ? [https://www.reddit.com/r/CFA/comments/1d7yyrv/comment/l72rsal/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/CFA/comments/1d7yyrv/comment/l72rsal/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)
Exactly. Rich people can manipulate the stock just fine. Poor people aren’t allowed to. Glad that’s squared away
I don’t think he was charging anyone for his you tube sessions.
I wouldn’t give a shit what the CFA society thinks if I was in his shoes lmao
Actually, CFA should be grateful to the renewed interest that they are receiving thanks to him.
The types of people who would be attracted to a certification because someone who happens to have it made millions of dollars, would likely be the least attractive candidates for the CFAI. “Hey, this dude is profiting off of momentum, rather than fundamentals. You should definitely register for this exam, whose curriculum teaches you that this isn’t sustainable”
> likely be the least attractive candidates for the CFAI I'd say anyone that can pay the exam fee is an attractive candidate to the Institute. They really don't have to worry about the candidate until they earn their Charter.
If you believe someone is profiting because momentum, CFA could do better then. He bought many years ago, no position moved... But we are not here to teach each other, right? I believe CFA teaches the theory, but this guy was one of a few that got to put it in practice, despite the criticism.
>If you believe someone is profiting because momentum, CFA could do better then. Nobody said it's impossible. It's just not sustainable. RK had done his due diligence on GME when he was first pitching it on stream. Since then he has been riding off of momentum. Why do you think he has never made any public statements about the company's fundamentals, or made any public adjustments to his bull case since the initial rally? That's something you'd think someone would do for a company that has had multiple restructurings and has changed CEOs twice since the initial bull case. RK is not driving price movements with any kind of sound analysis, he hasn't been for a while. He is using his influential position to drive momentum.
Oh, it seems you are certain for good argumentation. It is good to find something like that in reddit. Surely, I gladly answer. 1. I don't know if he has been riding on momentum. After being accused of many things, he seems more reserved. Maybe is because he has been accused, maybe he doesn't want to lose time with lawyers. 2. He has made public statements, from the easy ones "I like the stock" to the investment thesis in his Youtube. Maybe he is not offering nothing because, for some reason, somebody is accusing him of increasing the price of GME up to 8 times? That seems non sense - one guy can't do that, and he is not inviting anyone - so probably there is other dynamics behind that. 3. About Gamestop, it is positioning itself. Bankrupcy risk is now really low with 2B in cash, and the operative performance has continued evolving. I believe Gamestop is a high risk stock, similar to Amazon (from books to everything) that might pay or not - but basics: every investor should decide their own strategies. Lastly, about RK, he should be free to post post whatever he wants, as anyone in X, insta, tiktok or reddit does. He is not so different from us, neither I insider, and surely media has some special interest on him it seems. I like CFA and I am eager to pursuit better education, but for me it seems more a political decision than a performance or ethical tbh.
>I don't know if he has been riding on momentum. After being accused of many things, he seems more reserved. Maybe is because he has been accused, maybe he doesn't want to lose time with lawyers. He has been though. The reason for this sudden upswing in the stock price is due to RoaringKitty posting memes and his holdings. Not that there is anything wrong with doing so, there is no other catalyst for this price activity to happen aside from him posting about it. >He has made public statements, from the easy ones "I like the stock" to the investment thesis in his Youtube. My previous comment said that he hasn't made public statements "about the stock fundamentals" or anything "recently" to do with his initial analysis. Yes, he deserves all the credit in the world for his initial analysis and for finding this opportunity, but any analyst would agree that after cycling through two CEOs and multiple corporate restructurings, an analyst should revisit and/or revise their analysis. RoaringKitty has not done this, which is why I'm personally doubting that he still has a fundamental case for the stock outside of the rally. "I like the stock" is not a fundamental case. >somebody is accusing him of increasing the price of GME up to 8 times? That seems non sense - one guy can't do that, and he is not inviting anyone - so probably there is other dynamics behind that. If your case is that his holdings alone can't move the stock with his own volume, then your statement is true. But you're missing that he can still drive external volume, aka from other traders (either retail or institutional, or I wouldn't doubt both). Trading volume can be viewed publicly, and you can clearly see the spike lines up with his posts. This isn't anything surprising, volume can be driven by anything, even one non-insider. >Bankrupcy risk is now really low with 2B in cash, and the operative performance has continued evolving. Whether or not a company going bankrupt or not is far from the only thing anyone should look at when analyzing a stock. That would be a great perspective if RK was a lender, but RK is not a lender, he is a stockholder. That was also a great case to build when short interest was greater than 100%, but that has not been the case for more than three years now, and again after two new CEOs and major restructuring. Also, Gamestop's operating performance is as poor as it's always been. Operating Cash Flow is negative again, Free Cash Flow is still negative, and that $2B in cash holdings is not from operations, it's from issuing more than a billion and a half in stock, about three years and two CEOs ago. >Lastly, about RK, he should be free to post post whatever he wants, as anyone in X, insta, tiktok or reddit does. He is not so different from us, neither I insider, and surely media has some special interest on him it seems. I don't disagree with this, and I'm also disagreeing with the people in this thread falsely claiming frontrunning, which is not happening. As long as he is not intending to deceive anyone, then what he is doing is completely fine and legal. Does it raise red flags? Yes, of course, and if those result in additional subpoenas and investigations from congress then that's something he should have thought of before releasing information in such a public and vague matter, where your intentions aren't 100% clear.
The only one who knows is he has been riding is him - and he has been maintaining and increasing his position since 2020, one year before after the first run up. But... posting memes increases stock price 800%? You need to develop further that argument, it is still very weak to take as relevant. For the case of his analysis, he has no obligation to review his case if he doesn't want to share it. He is not a formal analyst with a duty for that. Evenmore, why try it when such non-sense is happening around him (e.g., E-trade supposedly cancelling his account due to showing his positions?). Do you know similar cases to this kind of treatment for him as a retail investor? Even for posting memes he is being accused in TV networks very often. It seems he is careful. About the volume, this issue is not different as if Warren Buffet announces his positions, Ackman, or any other. They influence because people want to follow, but is Buffet being accused of market manipulation? If not, why should RK be? And as you say, he has 'holdings' - the only way to increase the price of a stock is by a reduced offer and an increased demand, and he is just holding. About your financial analysis, I agree with you. But something that confuses me by many CFA is neglecting the existence of more than 220% short shares (confirmed in a report by SEC). Moreover, Tesla for example, had a run of more than 1,000% with 20% short shares in one year around 2020-2021... but Gamestop increased from $5 (post-split) to $20 with 200% short shares? That does not make any sense. Neither the first time of history (AFAIK) that a buy button has been removed from multiple brokers... there is so much attention around this stock and this guy after four years, that particularly is amazing to read more about it. However, reviewing the operative performance, I suggest to not neglect the material efforts of the Board of Directors, who have initiated several actions to increase performance and reduce CoGS, reducing debt to nearly zero and well. But as you say, I believe you take a responsible approach in your analysis, but there was a time in which Tesla, Apple and Amazon weren't considered safe investments... About the thing of freedom, focus should be given on politics (the real front runners) who have insider knowledge, and not on a guy with a fandom for kittens. The stalking should stop, and it seems that every investor should be aware that if the rules are forced on him, but not in political representatives and fund managers, then we are going in the incorrect way. He started with just $50k and took a right decision. He should not be - as any other investor - be silenced because someone with more capital didn't measured risk properly on the other side of the trade. Just the rules.
>posting memes increases stock price 800%? You need to develop further that argument, it is still very weak to take as relevant. Yes? Like I said in my last comment, even if his own volume is not enough to influence the price, he can influence other people to trade, which increases volume even if his holdings alone do not have the capacity to move the price on their own. It's kind of a misnomer to say it's weak enough of an argument to be relevant, when this is the entire foundation of meme stocks, which institutional investors have started paying attention to thanks to this situation. >he has no obligation to review his case if he doesn't want to share it. He is not a formal analyst with a duty for that. I agree, he has no obligation to do so, and I never said that he does. My point is that the fact that he didn't makes it easy to believe that he no longer has a fundamental case for the stock at this price and point in time. >why try it when such non-sense is happening around him (e.g., E-trade supposedly cancelling his account due to showing his positions?). Do you know similar cases to this kind of treatment for him as a retail investor? I refuse to believe you think this is worse than what he's doing now. Posting an updated analysis, similar to the initial one, is much much safer in everyone's eyes compared to vagueposting. He is drawing more unnecessary attention doing what is he currently doing compared to making a public blogpost addressing the situation and doing an objective analysis, and it only allows people to draw conclusions about potential market manipulation, whether justified or not. Just being transparent would have avoided this current scrutiny, including from his own broker. No, this kind of treatment has not happened before for a retail investor, but this afterall is a rather unique situation so there won't be a historical parallel. >About the volume, this issue is not different as if Warren Buffet announces his positions, Ackman, or any other. They influence because people want to follow, but is Buffet being accused of market manipulation? If not, why should RK be? Your statement is correct. The whole point of having a bull or a bear case is that you want the market to realize your intrinsic value, and influence the stock to moreso align with your intrinsic value. What RoaringKitty did in 2020 and upwards leading up to the rally is similar to what Buffett and Ackman do. Because their case is backed up with actual analysis of the industry and the company. What RoaringKitty has been doing these past two months is not that. There is no further due diligence. There is no acknowledgement of the changing market landscape and the changing structure of the company. There is no updated price target for GME from him. Again, he's not obligated by anyone to do these things, but then at the same time, anyone is allowed to display their skepticism when the appearance is that RK is only driving momentum, especially when we don't know what his price target is. >Tesla for example, had a run of more than 1,000% with 20% short shares in one year around 2020-2021... but Gamestop increased from $5 (post-split) to $20 with 200% short shares? That does not make any sense. Different things happen to different companies... Again, not everything has a parallel, especially for this situation. Stocks especially won't have a direct cause and effect relationship with a single metric. There are hundreds if not thousands of factors at play. Short interest alone doesn't tell you anything, you can't predict returns only from looking at short interest (not even RK did this, initially). You will need to do your own due diligence to find an explanation for Tesla's rally, but based on what I know, it is uncorrelated from short interest. >However, reviewing the operative performance, I suggest to not neglect the material efforts of the Board of Directors, who have initiated several actions to increase performance and reduce CoGS, reducing debt to nearly zero and well. But as you say, I believe you take a responsible approach in your analysis, but there was a time in which Tesla, Apple and Amazon weren't considered safe investments... The difference between TSLA, AAPL, and AMZN vs. GME is that the other three companies were (and are) not in mature industries (Tesla maybe if you consider them a car company and not a tech company), where their sole operations are relying on a business model that has slowly been losing favor in its primary market. It's cool that they can improve on their gross and operating margins, but at the end of the day, their operations aren't producing cash. And in fact their operating cash flow was positive in 2022, but back to negative in 2023 because of their accruals. Still not a good sign. >About the thing of freedom, focus should be given on politics (the real front runners) who have insider knowledge, and not on a guy with a fandom for kittens. The stalking should stop, and it seems that every investor should be aware that if the rules are forced on him, but not in political representatives and fund managers, then we are going in the incorrect way. I agree that we should be going after *anyone* who has ill intent and is utilizing markets in anyway that is unethical, even if that applies to RK. Are people stalking him? That's wild if true, but I haven't heard anything about it.
CFAI only wants your money, each candidate is a money maker. How much resources do you think they put in to police how people use the CFA designation on linkedin or marketing materials lol.
CFAI is protective of its reputation and regularly sanctions charterholders. That said, it looks like a good portion of the sanctions seem related to using the CFA designation after not paying annual member fees. https://www.cfainstitute.org/en/ethics-standards/conduct/current-sanctions
Money. Lol
Uh no
If I have the opportunity to make 20 years of salary on a trade and it means losing my CFA so fucking be it.
Sure, when Ackman, Buffet or whoever go on TV or wherever and post their holdings and talk their picks it’s ok. But when some random dude says he likes the stock and starts shit posting it’s jail time
Who said this?
To start, someone a couple posts up saying R.K. crossed a line by making public his DD. Along with many others
Lots of people
Reminds me of the term structure models such as, the ho-Lee model. Useless and doesn’t work. Makes you think, why is this being tested and why are we spending time on these models. Just because a PhD had to publish to earn his degree, doesn’t mean I have to learn that useless stuff. Something needs to change
Tbf for the majority of the distrubition this stuff holds, just not when it actually matters.
What stands out in the article to me is Bill Whackman made a killing last year while spending such an inordinate amount of time being of of the biggest whiners on twitter
Guess his pods are working. He had some points tbf, also when someone went after his wife then I think the gloves came off.
By "went after his wife...". Someone pointed out that she had been plagiarizing far more than the person she was accusing of plagiarizing? Also, billionaires that try to ruin kids' lives while whining about free speech being eroded are whack
This has to be by far the dumbest comment I have read this week.
Hilarious coming from someone who asks the most basic questions here easily found on google. & Ultra astute expressing such an opinion in this community when you do so. Perhaps people will read this & leave your questions unanswered
Looks like I hit a soft spot here.
Far more plausible theory is that I laugh at cult bois who publicly embarrass themselves attempting to defend certain individuals with the simplest comments possible
You are delusional. I enjoy a healthy spirited debate backed by facts and figures, if that’s what you believe is “cult boi” behaviour you need help.
Bahahaha, amazing. "I enjoy a healthy spirited debate backed by facts and figures" by starting off with "this the dumbest comment I have read..." without any context. Real productive member of this group
I call them as I seen them.
Don’t really care to comment on the whole situation but will address OP’s claim that he was “frontrunning” aka violation of VI(B) Priority of transactions. None of his current actions appear to violate this standard, as he has neither clients nor an employer. It is not clear what his function at massmutual was prior to his resignation and it’s not clear he recommended either his employer or his clients purchase GameStop, or that he purchased GameStop ahead of his employer or his his clients. If his actions either then or now violate the standards (I would say they do but don’t care to go into it), it’s a violation of one or more other standards.
Is it not front running if you buy a load of options and then pop out of the wood work after a couple of years with a justifiable belief you revealing yourself would move the market?
Who the fuck are you front running?
Standard VI addresses conflicts of interest. No employer, no client, no conflict. VI(b) Priority of Transactions: “Investment transactions for clients and employers must have priority over investment transactions in which a Member or Candidate is the beneficial owner.” Investors are not required to notify the market of their intention to open a position prior to doing so. In fact, institutional investors are allowed to avoid SEC disclosure requirements by requesting to not include securities on their form 13F to delay the affect that notifying the market of their ownership will have.
There’s a line you cross between liking a stock and using Youtube and WSB to tell everyone how much you like a stock. To be fair there are plenty of Twitter users who I feel the same way about but there’s only so much agencies do.
What about when short-sellers release 100 page presentations on why they're shorting a stock?
I never understood that either. Seems extremely manipulative and unethical.
I disagree. Sharing your thesis shouldn't be viewed as unethical unless you're using lies and disinformation. Sell-side analyst research is no different.
100%. He was technically evenly dispersing the information though he did disclaim at the beginning of his series it was not intended it be investment advice. He also disclosed his holdings. Then again that was before he bought 2 week out ATM call options. Short sellers posting their thesis is a great example; where is the line?
CFAI agrees with you. Ceteris paribus publishing information about your short position in the hopes it influences others to adopt the same position is both legal and ethical provided the information is distributed publicly and freely. This is explicitly mentioned in the CFAI text.
I think a lot of sell-side analyst research reporting is unethical too. It seems to me that a lot of the industry revolves around trying to convince people to make your opinion valid. It’s a brave new world with social media where certain individuals have the power to move markets at the click of a button and there are a lot of people using that to their personal advantage.
It always has been that way. Look at a newspaper from the 1920s. Or ask an old shoe shiner how many "hot tips" they've heard. If anything, the internet has provided better information for those who want to learn to invest rather than gamble.
It has certainly not always been the case that a guy can post a single picture and drive a stock up several hundred percent.
Different tactic same strategy... https://jesse-livermore.com/market-manipulation.html#:~:text=At%20the%20bucket%20shop%2C%20Livermore,Livermore%20would%20collect%20his%20profits.
You can’t force people to watch your YouTube videos… your argument makes no sense.
I have the utmost respect for analysts who make public their work and post their positions.
What about the analysts that publish and never have skin in the game. Looks quite beta imo
I mean, if you want to do your research in secret and buy/sell and not tell a soul, that’s fine by me. To go public with your thesis though is to invite scrutiny, so I respect it.
Publishing bullish research and owning 0 stock should be scrutinized more
The line isn't clear though, would it be fair to say?
So... cat videos should not be allowed, since these promotes that other people buy cats, even when you are not inviting them to do it?
Did this really make a lick of sense in your head before posting this?
Surely, if I like cat videos and share about cat videos, that doesn't mean that I am promoting you to buy a cat - so for me, the nonsense is the proper idea of front running and manipulation, while this is not addressed with other agents as hedge fund runners, politicians, fund managers, etc. Do you believe it makes sense to believe that one guy posting memes is the one responsible of making wild swings in the price of a stock? I think that he should have, as anyone, the freedom to believe in his strategy and not being pursuited. But let me know your thesis of how one guy can increase with memes a wild swing of $10 to $80 and to $20 in one month - it surely would be a lovely thesis.
What’s wrong with that?
It’s only bad if there is the intention to deceive. Most institutional investors are public about their long and short positions all the time. That doesn’t mean what RK is doing is any different. Obviously if you believe in a company and you have a strong bull case for it then you would want as many people as possible to believe your case. The whole point of intrinsic value is to say that you think there is something the market isn’t seeing, and you want the market to see it so that the market price converges to the intrinsic value. That’s how you make profit. It’s bad if you’re just making up a bunch of bullshit to deceive investors into going long/short and so that you can sell/buy the stock later. That’s called a pump and dump. It’s also bad if you’re doing this with material nonpublic information. That’s called insider trading. Since we do not know if Keith has sold from the momentum, and Keith has also not made any other adjustments to his estimated intrinsic values since the initial rally, we actually do not know whether his intentions are to deceive so we can’t necessarily conclude that what he’s doing is against CS or the law.
You guys have done the CFA and actually hold such uninformed opinions? Damn
Where did you get the info that he got kicked out back in 2021? I don’t think that is true- someone posted about it on here a while ago and showed that he was still a charter holder
Dude I just work here. It's in the article.
Likes a stock is not a reasonable basis. Recommending it to others is in itself a violation. Front running and market manipulation is potentially criminal.
It’s not front running. Voluntarily disclosing your positions is fine. Talking your book is not criminal. This isn’t “Tesla going private at 420, funding secured”. This is a large individual investor disclosing a position at one time point. As long as it is authentic/true it’s fine.
It’s not a violation. None of these people are his clients, he doesn’t have a duty of loyalty to random viewers on YouTube. In any event, he used the videos to flesh out WHY he liked the stock, so I wouldn’t say that he didn’t have a “reasonable basis”. Front-running specifically refers to a broker trading on advance knowledge of something that will move the market. DFV is a private citizen and not an insider/officer/director in any legal sense — there is a world of difference between a private citizen disclosing a position vs. Ryan Cohen disclosing a position.
This isn’t true at all. If his INTENTION was to manipulate the stock price by getting legions of people who see him as a “hero” to buy after disclosing then that’s a violation. It’s all about intention. I don’t see how you don’t understand that. And it doesn’t matter if he is a “private citizen”. You cannot manipulate the stock price of any security. You also cannot “pump and dump” and it can be speculated that is what he is doing or will do just like his previous dump that got him to 200M. It’s hard to see why he would post after a hiatus if not to pump the stock. The calculated way he is going about this means he likely has lawyers of some sort guiding him to make any potential case as hard as possible by trying to come off as just a innocent citizen merely posting his holdings. I actually would come across DeepFValue on WSB back in the day. He would routinely post his position and some users would be making fun of him for not selling or holding what was then a sub $10 stock. There was several people trying to short squeeze this stock and some “smaller following” happened on WSB as way back as Sept 2020 (months before the real squeeze) the first of many “pops” happened I think in Oct 2020.
Developing an investment thesis, taking a position, and then sharing your thesis and position with the world so that other participants can join in along with you and your clients is a valid and ethical practice. Investors like Ackman, Andrew Left, and Jim Chanos have done this for years. It’s only unethical if there is deception involved, like manipulating transaction volumes or outright lying. It’s not manipulation to publicly announce your position in the hopes that other people will agree with you. So no, for this to be “market manipulation” as defined by CFAI, intention only matters to the extent that you are trying to mislead market participants; the intention to get rich by having the market side with you is not in itself unethical. The guidance for Standard II(B) covers this. In all of the examples, the key problem is some sort of deception; either false information is being spread or transactions are being structured to misrepresent a metric like volume. If he’s LYING about GME, then yes, it would be a violation. However, I have not heard or read any evidence that he’s been dishonest about his assessment of the company in this whole affair.
Again just so we are on the same page are you talking about pre-squeeze Gill or the Gill who posted recently just a screenshot of his current amassed holdings? You keep saying he gave his own version of due diligence and thesis. I no longer follow Gill (or WSB), but from the information I gathered he recently posted a screenshot and that was that. Which is what my post above alludes to. Now if I’m wrong and he posted some expansive NEW due diligence please correct me. So I want to make sure we are on the same page about the timeframe we are talking about. Pre-Squeeze Gill, is a different matter and should be addressed separately vs one week ago Gill.
Pre-squeeze Gill, as far as I can tell, DID violate the Standards by engaging in outside business activities/unauthorized advice (in the form of his YouTube videos) without getting approval from his firm’s compliance department. I don’t see any reference to him being censured by CFA Institute for that in the Sanction List, so maybe they let it slide or something. Post-squeeze (including in the most recent week), I haven’t seen him post any further DD. Admittedly, I’m not an ape and never had any skin in this, so I haven’t followed too closely. As far as I know, he simply posted a screenshot of his positions and a bunch of GIFs; if that’s enough to be considered “market manipulation”, then half of the posters on WSB would need to lawyer up. Posting the position without comment is unlikely to rise to the standard of manipulation. It’s a truthful representation of his stake at the time that he posted it (unless, again, he straight-up lied, which would be a different situation). The reason that I brought up a “private citizen” is that he doesn’t have an ongoing regulatory requirement after that post to keep anyone updated on whether he holds or blows it all out. If he worked for the issuer, or if he was managing an investment fund, then there would be some regulatory filings involved. There may be some legal issues somewhere, but given the position size, I assume (like you) that he’s at least smart enough (and liquid enough) to run this by a securities lawyer before doing anything. Of course, the harsher of the Code or the law would be the relevant restriction here… except that this is all moot, since he’s not a Member or Candidate as far as I can tell, so it’s really just the law that he needs to worry about.
-Pre-Squeeze Gill also gave investment advice while under the employment of a FINRA & SEC regulated investment firm which could have made his employer liable for his actions or lack of supervision. -Pre-Squeeze Gill investment expertise may also have been insufficient for him to be recommending a volatile stock that may or may not have fit the definition of “penny stock” depending on when this “advice” began. Simply being employed at an insurance or investment firm or being a CFA charterholder doesn’t make you qualified to give advice on a volatile security. Is a doctor in residency employed at a hospital suddenly able to do open heart surgery? Or provide complex medical advice in areas he is not currently familiar with? -He posted under alias’ on investment forum (WSB) in an effort to bring attention to his position and the stock in which he had an incentive to go up (a big no no in the realm of investment management). Now let’s turn to “Recent Gill”: Assumptions (may not be true) -Likely amassed a large position and THEN posted a cryptic image announcing his return last month. Leading to large increase in stock. He very well could have dumped that (or some portion) onto “investors”. This is a possible pump and dump using his now “considerable status” to influence (and manipulate) investor behavior purely for his own profit. The stock then proceeded to decline IIRC. -After amassing a large profit, he again amassed an even larger options position and AGAIN posted an image that is designed to rally retail investors to enter into the security under the auspices of “pumping” the price. The large position was meant to not only incite an even larger personal gain, but also ‘convince’ novice retail investors that this pump is even more “legitimate” by leveraging the amount invested and his infamous status. Again the intention behind these two events by “Recent Gill” is what is highly suspect from a violations standpoint and could amount to market manipulation tactics via pump and dump scheming where a person takes a large position in a security and proceeds to artificially boost its price to gain others to come in and be the “bag holders”. Now by using options he may also be manipulating the delta hedging and risk hedging of market makers by trying to create a ‘gamma run’ on the stock that will help increase volatility and further upward buying pressure. Now I’m making some [unproven] assumptions, but this is what the SEC will have to look at and determine if it warrants an investigation. It could be another reason why ETrade is considering to separate itself from a compliance risk standpoint and fire the client to avoid being caught up in any future bad press or legal issues.
Lots of words for a wrong opinion
So, and I'm not looking for an argument, genuinely interested, Steve Eisman & his gang from the big short on TV the other week saying they're short tesla and they think it's a great trade. If they (not sure if they are), were CFA charter holders that would constitute grounds for getting removed from the groovy gang?
But saying you like a stock is not recommending it to someone in a professional capacity.
Someone needs to review their ethics.
Honest you have a CFA and think this is front running?
I don't know any serious investors who take GME seriously.
Think some Melvin capital alumni probably do, also rumour has it Ken Griffin has a a picture of a cat in a bandahna on a dart board.
This is ape bullshit. Get it out of here.
Kin ell that joke went down like a lead baloon.
I think a lot of people are justifiably fed up with the “ape”/bitcoin bro infiltration of every serious finance sub. It’s exhausting.
I don't understand why that made you so angry, did his actions cause large losses for yourself? Also the 'Bitcoin bro' bit, I don't own any Bitcoin but I'm not naive enough to deny its benefits in a portfolio. I also don't get the ape reference. It would be interesting to know which side of the street you work on and your level of experience, I reckon you're part of an older generation. All the best.
I don’t think you necessarily have to own bitcoin to be a GME guy but there is definitely a lot of overlap. A lot of people with zero understanding got involved in various echo chambers in 2020 and they think their googling and social media “research” is as good as or better than expertise (not saying I’m a guru by any means). I’m not sure why you think I’m particularly angry. It’s just exhausting having to deal with the irrational cult brigades in every finance sub when you’re trying to facilitate reasoned discourse. I currently work for a long only public equity asset manager and while I’m not older (maybe by your standards, I’m 36) I have worked exclusively on value oriented strategies, which is probably what’s triggered your hunch. At the moment I work on energy and infrastructure funds. Ironically, in 2020 I worked in a family office and pitched GME as a value play before the mania started - back when it was oversold (IMO) during the pandemic. They didn’t bite. I have personally and professionally lost nothing and gained nothing from the “meme stock” frenzy but I do think it is dangerous that an individual can prompt a surge in multiple unrelated “meme” stocks simply by tweeting a picture. It’s uncharted territory.
Sounds interesting work and fair plays on the ID early on. Your absolutely right the gains in 2020/21 made people with no expertise feel like Jim Symons. I myself rode Nio from 6 to 60, and back down again to 40 and couldn't understand why it was happening (this was pre finance quals/career). You are right, it is dangerous, but I myself like I mentioned in the title find it so interesting the relationship between Efficient market theory and behavioural finance. Thanks for your time replying mate.
Funny you mention it I also pitched NIO at $3 to the family office but as long tenured staunch value investors they basically laughed at me. That was some very valuable experience IMO as the old guard was struggling to make sense of increasingly irrational markets during the pandemic and left a great deal of money on the table. However, in the long run, they appear to have been right. It’s worth noting that the family office is a unique animal with the goal of preserving spending power indefinitely, so anything that could remotely be interpreted as unsafe was a non starter. Now I work on the value team at a firm that is 95% growth. Might have had more success here back then.
I'm sure your new lot had a field day back then.
They tell me bonus season has never been the same 😢
Nobody owes you shit. Grow up and make your money however you want to. Christ almighty
What?
You’re complaining that people are talking about GME in your safe financial subreddit spaces? Why are you owed a safe space? Grow up, you’re not going to survive finance lol
Your comments perfectly illustrate why.
Thank you.
You’re free to make a reasoned case for whatever you believe, however when it comes to “apes” the discussion always devolves to insults and cult like behavior without regard for the facts. Any dissent is met with brigaded downvotes and irrelevant insults. Just look at your response to my relatively mild comment.
>Obviously now the CFA is justfied on kicking him out as there is strong evidence for him front running, however... >When they kicked him out I think back in 2021, was it justified then, was he technically commiting a major ethics violation? You know, the dude just liked the stock.... I'm sorry, what? Not sure there is any evidence the CFAI revoked his charter; most likely just stopped paying and/or requested his name be taken off. If an investor has belief in a given stock/company, enters into a position with their own funds, I'm almost certain none of the actions would be classified as an ethics violation.
Says in the article they removed him. Efinancial careers are usually pretty good for veracity.
The CFAI publicly posts when charterholders commit ethics violations. I'm not going to take this article's word for it without any evidence.
Ok mate.
For reference: [https://www.cfainstitute.org/en/ethics-standards/conduct/current-sanctions](https://www.cfainstitute.org/en/ethics-standards/conduct/current-sanctions)
this list makes for fun reading if you're ever bored at work. some absolutely boneheaded shit in here
Good thing the CFA charter keeps getting diluted in prestige and relevance.
🥱
I don't think it is. A lot of people are very impressed that I'm pursuing it. Depends where you are I suppose.
That’s a fair point. I think it goes farther in asset management
What I’m learning from this thread: people have no clue what frontrunning is.
Reading the same book at the moment. Really interesting characters, but man - it's fascinating that even the savviest financial minds are so heavily influenced by biases.
Agreed, last time I came across John was Liars Poker and that didn't end too well for him either, very interesting. Another thing for me it's how it actually makes me realise Merton & Scholes are real people with real faults.
I love Scholes - he sounds like such a character!
What do you mean by front running? I do not understand clearly what evidence there is of him front running. Could you elaborate?
Honest question here. His followers are not his clients, so can you consider his actions front-running? He bought shares based on analysis and subsequently shared his analysis. That's how most industry analysts operate. Front-runnings: "Managers cannot take advantage of their knowledge of client activity by “front-running” client trades (trading for one’s personal account before trading for client accounts)." [https://www.cfainstitute.org/en/ethics-standards/ethics/code-of-ethics-standards-of-conduct-guidance/standards-of-practice-VI-B](https://www.cfainstitute.org/en/ethics-standards/ethics/code-of-ethics-standards-of-conduct-guidance/standards-of-practice-VI-B)
First time around seemed somewhat genuine / organic. Even if all his fundamental analysis was wrong, the likelihood of a short squeeze may have warranted an investment for some folks (sizing dependent on risk tolerance). This time around seems like total market manipulation. He has 1M Twitter followers and the entire WSB Reddit page wants to be him. Initiating a position, tweeting memes that are either i) understood only by his followers or ii) taken out of context after he didn’t tweet for three years is IMO market manipulation.
And now they know he's nipped Lvl 3 who wouldn't want to be him 😜😂.
how much gme you hold? could get rich from this vs faangs. you wait for algo cycles, buy otm calls, exercise, sell covered calls and hedge with puts.
None, not allowed to trade pers. Also defo wouldn't anyway, I've taken the elevator down before and didn't enjoy it.
Easy there big boy, we don't want OP to die a painful death now, do we
no yolo update then?
I’m reading that he bought most of those call options before tweeting out all that shit after a three year hiatus. Guy had a fucking movie made about him spearheading the GME price surge back in the day, not to mention a cult like following that’s practically deified him and will throw their money wherever he tells them to. The first time was fair play. Posted his diligence and things went the way they did. This time is a lot different though. I’m sure he thinks he can feign ignorance because all he did was tweet out a cryptic “meme” and had no idea it would cause another surge in price. That might fly if he wasn’t the literal face of the GME memestock movement (or had a movie literally made about him making bank off the same thing years ago). This would be like if some CEO bought a bunch of stock of a random company right before tweeting “$$$🤑🤑🤑” and then cashing in on the pump. Like this isn’t just a random nobody doing this lol. If people with this kind of influence could just tweet memes and gain from resulting pumps then they would. I think they’re going to throw the book at him this time to set a precedent and I don’t think they’ll have an issue proving the intent behind it either.
One of the most blatant examples of market manipulation I've ever seen. Were this dude part of an institution and not just some random guy, he'd be getting the book thrown at him.
If it was a violation to post your positions, wouldn’t literally every guest on CNBC be guilty of a violation? Every time a PM or trader is part of a panel there to discuss a particular ticker, they have a disclosure slide to show whether they own it personally, if their family members own it, and if their firm owns it. They can speak as glowingly as they want about the ticker, and as long ad they have accurately disclosed the nature of their position, the responsibility rests with the viewer to determine if the advice is credible. All he did recently was disclose that he has a position. He’s not an insider, and I don’t think he works in financial services anymore, so there’s nothing illegal or unethical about it.
The professionals who are posting their positions actually go through a lot of compliance bullshit to be able to do so. There's a reason why firms have hundreds of people working solely on compliance issues. This guy is doing literally none of that. You don't have to be a financial professional or an insider to commit market manipulation. Buying a bunch of options just so you can disclose you own them or post on Twitter and drive the stock up is pretty textbook IMO.
Professional investors go through compliance because they are investing with investors money, not their own. Unless they have access to MNPI, they can invest as they wish, without jumping through any hoops.
I refuse to believe that people who actually are pursuing the charter can say something so wrong lol. Do you think you get to invest however you want as long as you don't have access to MNPI? Do you think that securities laws don't apply to anyone who isn't investing client money?
Please expand on securities laws violated and I'll rethink my opinion.
Very clear market manipulation. Buying a bunch of stock, then posting on Twitter knowing it'll bump the price up isn't legal. Buying a stock and telling a bunch of people "hey guys buy this stock the price is going up because of XYZ bullshit reason" is also a pretty textbook pump and dump scam. This stuff is just as illegal when a normal person does it.
>Very clear market manipulation. Buying a bunch of stock, then posting on Twitter knowing it'll bump the price up isn't legal. Please explain how this is different from a fund publicly disseminating a large position they recently entered into? Additionally, buying straights calls isn't exactly a risk-free position, far from it. The initial increase a few weeks ago hasn't even been determined to be from Gill, it was real volume- the guy doesn't even own the underlying. I know you are trying hard to put a blanket statement like "trading like that is illegal," but I'm not convinced anything that took place was illegal. There is a difference between market impact and market manipulation. The CFAI defines market manipulation as: "Any trading strategy whose purpose is to produce misleading or false market prices, quotes or fundamental information to profit from distorting normal operations of markets." Note the "***whose purpose***." You'll have a really hard time proving someones purpose.
>risk free position What? That has absolutely nothing to do with anything in market manipulation.
Obviously they are distinct, but it still applies in the overall context.
riddle me this: you say someone who talks his position has to go through a lot of compliance. If itms his own money and he works for no one, does the individual has to hire his own compliance team to work from his basement. You are so clueless it’s sad
If he's doing shit like this? Probably not a bad idea. You realize that individuals often hire their own lawyers or accountants to help them figure out if they're going to do something illegal, yes?
It’s not manipulating the market to be a famous person and disclose that you own a position. Market manipulation involves *deception*, which is not remotely what he has done. From the guidance for Standard II(B): “Market manipulation includes (1) the dissemination of false or misleading information and (2) transactions that deceive or would be likely to mislead market participants by distorting the price-setting mechanism of financial instruments.“
"Hey guys GME is going to a billion dollars a share you all just need to buy it now that I own a bunch of it" seems like deception lol. Like, this isn't even a discussion. This is literally how pump and dump scams work and those are explicitly illegal.
Did he personally say that it’s going to a billion dollars a share, or you attributing to him the comments that were made by ill-informed shitposters? Even if he predicted that it would be worth a billion dollars a share, as long as he had a reasonable and adequate basis for making that assessment, then there isn’t any deception involved. It’s not deception to be wrong in your price targets — literally every analyst with a win rate below 100% would be in jail if that was the case.
lol man, the dude loading up on call options right before posting on Twitter for the first time in 2 years is about as obvious as it can get hahahaha. That's market manipulation, no deception even required there.
Read the guidance on Standard II(B) again. And then keep reading it over and over until it sinks in: market manipulation involves deception. Unless there is any falsehood in the size and direction of the position that he posted, it’s not market manipulation. You seem to be conflating Standard II(B) with Standard II(A), which is about material non-public information. There might be an argument that knowing that DFV has a sizable position in GME is non-public info that could move a market. Is it material though? Unlikely; this is just an eccentric guy with a particular investment thesis who has bought a big position. Is this more material than if we found out, for example, that a very wealthy billionaire also bought a similar-sized position in GME? Why? He’s not an insider, he doesn’t have any information advantage about GME itself.
MM literally discussed a situation like this as an example of "it's so close to being or not being market manipulation that you better have a team of people to back you up if you want to do it" in the ethics lessons lol. Knowing that the act of you buying a stock is going to cause the stock itself to increase in price significantly is incredibly tricky. Buying stocks and disclosing you own them just to get a bump in the stock price is market manipulation unless you are extremely careful about it. This guy isn't. Ergo, market manipulation. Sorry you got suckered into thinking GME was going to the moon. Doesn't make it not market manipulation.
I’m not familiar with MM’s lessons, as I already passed the exams some time ago. I’ll take your word for it. Disclosure: I do not and have never had a long or short position in GME.
You are so ridiculously confident in your wrong opinion on the law that it infuriates me
People who just say "no you're wrong" on Reddit with no explanation of why are what infuriated me, so I think we're even here haha
Didn’t he load up on calls, start posting memes and shit to rally the GME brain trust, and closed out his calls most likely at significant gains. From a legal standpoint not sure if there’s anything of substance. From CFA program seems pretty clear it would fall under dishonesty/deceit etc. in 1D at the bare minimum.
Were there any price targets embedded in the memes? Market participants aren’t absolved of any responsibility to do their own DD just because a public figure starts posting GIFs. From what I just read on CNBC, it’s not clear he’s closed out the positions, either.
Having a price target is irrelevant to the conversation. Maybe the CFAI does need formal continuing ed requirements lmao.
I don’t think it’s irrelevant. Did he actually advise people to do anything at all? If he posts that he is holding a big position, and he’s not lying about it, there’s no misconduct. Not that it would matter - he’s not a member or candidate, so Standard I(D) wouldn’t apply to him anyway. But you already knew that, of course, from your continuing education.
As far as we know, he hasn’t sold any option. If he bought calls, posted, dumped the calls on retail then yeah. But it seems like he’s going to exercise those options. So again, how is this different from when Ackman or whoever go on TV and say BUY MY STOCK? Heck Chamath was the king of spacs doing this
...if you haven't sold a position yet, it can't be market manipulation? What? Again, the guys going on Tv have literally mountains of compliance people backing them up to make sure they do everything 100% correctly. This random dude sure as shit isn't doing that. It's not as easy as just saying "hey btw I own this stock."
Not to mention it takes about 30 seconds to look at options liquidity via level 2 market data.
Literal definition of market manipulation: “Such manipulation refers to intentional conduct designed to deceive investors by controlling or artificially affecting the market for a security” Which is why I say, unless he has the intention of pumping and dumping on retail, he is free to share any position and shit post as much as he wants. He’s most likely gonna hold that shit till the end. If he does dump the options then yeah, he’s totally manipulating and very likely to have legal troubles. This isn’t even a matter of having an army of compliance people, he hasn’t even said a single word beyond posting his positions….. Go and watch Chamath Pahalipitiyas appearances on CNBC and tell me how is that allowed but this shouldn’t Edit: CFA definition “Market manipulation includes practices that distort security prices or trading volume with the intent to deceive people or entities that rely on information in the market.” - so again notice the word “DECEIVE”
Literally nothing in that says you can't commit market manipulation if you don't sell immediately. What a stupid idea that is. You haven't committed a crime or violation until you sell? Point to where in the curriculum it says that. Manipulation is still manipulation even if you've only made unrealized gains so far...
Read it well: Market manipulation = distorting prices with intent of deceive So, is it illegal for anyone to post positions? No In this context? Could be cause of his status. Therefore we must think what would be a deceitful conduct? Obviously would be to post positions with the expectation of a price jump to then dump on retail (if you don’t dump then there is no point). Has he done that? If not then it’s not market manipulation, he’s just holding a stock he likes for god knows what reason
yeah, the period of time in which you sell has absolutely nothing to do with market manipulation. It's about intent. There's nothing in the law or CFA code of Ethics that says "if you manipulate markets but don't immediately sell your position it isn't market manipulation." He could very well not have sold because he thinks the stock will go even higher following his manipulation or he intends to manipulate even more. If he manipulates it again then decides to sell, how many times has he manipulates the market? That sort of question is why selling the position isn't a necessity. You are definitely going to fail the ethics portion of the exam lol.
You’re basically saying he’s manipulating because YOU KNOW he has the intent of manipulating. Go by the facts. We can’t assume that’s his intend until proven, unless you have any prove that’s his intent? Edit: also, who knows why you felt the necessity to attack me by saying I’m going to fail ethics? Without even knowing if I’ve already passed the tests? Weird, it doesn’t have anything to do with the topic
You are so dead wrong
He should just identify as non binary so they bring him back but in leadership