Sheds a revealing clue as to whether Biden’s government will seriously investigate Robinhood and hedge funds for market manipulation.
The financial short squeeze by Redditors against Wall Street hedge funds is comparable to the riot at the Capitol, according to a Clinton-era former SEC Commissioner.
Former Commissioner for the Securities and Exchange Commission Laura Unger explained that the Reddit community r/WallStreetBets attempting to buy up GameStop shares to squeeze the wealthy short sellers this week is similar to the Jan. 6 riot at the Capitol.
“Everybody is scratching their heads over this: ‘What should happen? What is the right thing to do to control this or stop this?’” Unger told CNBC Friday. “not unlike what we saw on January 6 at the Capitol.”
“If you don’t have the police in there at the right time, things go a little crazy,” Unger continued.
“And that kind of feels like what’s happening with this,” she said, but quickly walked back from her comparison, saying the short squeeze is “much different, much lesser degree; it’s financial harm, not personal bodily harm.”
“But that’s the same kind of platform-created frenzy that people are operating under, and these are very trying times,” she added.
Unger’s remarks against the Reddit community are a stark contrast to those of Barstool Sports founder and day trader Dave Portnoy, who said Thursday that the Robinhood brokerage app CEO and some hedge fund players “have to go to jail” for freezing stock trades.
“When I saw what Robinhood was doing — ironically Robin Hood [the app’s eponym] took from the rich and gave to the poor even though they do the exact opposite — I was stunned,” Portnoy said. “I think it’s criminal. I think there has to be an investigation. I think people have to go to jail.”