I — and my patron/master, Undisc — like weird, quirky financial-market stories. Usually they come our way via Matt Levine's newsletter Money Stuff, to which I'm addicted, but today I'm beating him to it!
Lemme present you, a weird-ass op-ed in the WSJLemme present you, a weird-ass op-ed in the WSJ
The crime of insider trading consists in taking advantage of other investors by buying or selling stock based on material, nonpublic information that could affect its value.
"Call it the influencer penalty.""Call it the influencer penalty."
Or market manipulation-ish? Dude said something online, a bunch of people traded on those statements... and the DOJ decided it's a crime? I'm confused.
Actually funny combination:
- Buy a stock = LEGAL
- Share an opinion about said stock = LEGAL
- Sell a stock = LEGAL
= doing all three, while having a large social media following? Obviously ILLEGAL
the government doesn’t allege that I lied. Prosecutors don’t claim I fabricated research. At a hearing last month, a government lawyer told the court that the defense—meaning me—“wishes this were a false statements case, but it’s not.”
No comparable rule exists for individuals with no corporate affiliation and no elected office who share investment opinions online. I know because I asked. In January 2025, I filed a petition with the SEC requesting guidance for market commentators. I asked for a safe harbor. I asked for definitions. The SEC never responded.
Oh, but maybe it was like a small, irrelevant stock and the traded really moved some liquidity there? NOPE. Dude traded Tesla and Facebook and Nvidia (#1415289). Gimme-a-break.
WELCOME TO THE LAND OF THE FREE, where speech is somewhat protected and trading while tweeting is illegal!
"The First Amendment doesn’t specify a follower count at which its protections expire.""The First Amendment doesn’t specify a follower count at which its protections expire."
The most important piece of information might come at the end, honestly:
I guess that settles it?
I didn't know Citron Research.
I read the about page, but what's the extra context I'm missing? You mean it's a hit job because they are anti Wall Street?
They are short sellers but it's the way they do it:
they take a short position then a few weeks later they publicize a report saying we are shorting this company
Yea
"Every day, people on X say Bitcoin is going to $100,000. Most of them own Bitcoin. Under the government’s theory, selling before it hits that target is fraud."
I find this to be somewhat a non-sequitor.
If a public figure mentions their opinion on higher Brent crude, water utility prices, or precious metals prices, that's not dealing with securities. There's a difference, no?
There is, yes. Commodity vs security at the very least
Insider trading is dumb crime in the first place. Anything that's only adjacent to it will be even dumber.
Nice one.
Not entirely novel. Since 2023, influencers and celebrities tied to a token that miserably spiked and failed have been sued in civil court. And a number of pump and dumps have been pursued criminally, particularly in the NFT world.
That seems somehow more OK. pump-and-dump scammers etc
Citron Research is a short selling hedge fund, Left especially.
DOJ and SEC hate short sellers.
https://archive.ph/hBvzR
Seems like a test case and an important one.
If the intention is to influence the market and profit from it can that be effectively market manipulation even though you might not give any false information except omitting to notify your intention to sell?