By u/ Squirrel_Inner
“re-proposed Rule 9j-1 would provide that: (1) a person with material nonpublic information about a security cannot avoid liability under the securities laws by making purchases or sales in the security-based swap (as opposed to purchasing or selling the underlying security),(2) a person cannot avoid liability under Section 9(j) or re-proposed Rule 9j-1 in connection with a fraudulent scheme involving a security-based swap by instead making purchases or sales in the underlying security (as opposed to purchases or sales in the security-based swap).”
“For example (of manipulation), if a single counterparty has a $5 billion security-based swap position distributed equally among five different dealers on the same underlying equity security, public reporting of that security-based swap position would alert each dealer to the total exposure of the reporting counterparty. In the event of an issue involving the underlying security or the counterparty’s ability to make a payment on the security-based swaps composing the large position, some or all of those dealers could then take actions to protect their positions”
If you’ve read the swaps DD, then you know this is exactly what it is suspected that Citadel is doing to manipulate GME through the “meme” basket. GG didn’t have to put this in the rule. He didn’t even need to propose this rule in the first place. If there’s evidence that any of his rules help the SHF more than hinder them, I’d love to see it.
For those who only care about DRS and don’t care about stopping market manipulation, cool. You do you, but it’s actually possible to do both. It’s not an either/or thing and all evidence seems to support the idea that GG is doing the best he can to steadily enact rule changes that help household investors and prevent market manipulation by big participants.
We all know they will get shot down in court if they go one hair’s breath over the line. Remember that interview with the ex-SEC guy complaining to Jon Stewart about it? Didn’t he sound frustrated? Hell, he was on the verge of tears. The guy genuinely wanted to be one of the good guys and everyone treats them like crooks because their regulatory authority is overridden by the actual crooks in Congress and the courts.
If you don’t care about the rules or Lauer, or Gensler, that’s cool, but if you’re going to say they are enemies of retail, then I want some hard proof. “It’s taken too long” is not proof, if it were then you could make the same argument against GameStop, RC, and even those of us who invest in it. None of us has been able to put a stop to the corruption so far, but that’s not for a lack of trying.