Oct. 29, 2021
Members of the Asset Management Advisory Committee, I write to you as a retail investor of Gamestop and AMC Entertainment Holdings. According to their mission statement the SEC is charged with protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation. I am led to believe that the SEC "protects investors by vigorously enforcing the federal securities laws to hold wrongdoers accountable and deter future misconduct." As the Asset Management Advisory Committee (AMAC) I'm led to believe that you provide perspectives on "trends and developments affecting investors and market participants". I would therefore like to draw the attention of AMAC to the following images to illustrate trends and developments affecting investors of Gamestop, AMC and other so-called "meme" stocks: 01 Feb 2021 - 05 Feb 2021 4 Jan 2021 - present 4 Jan 2021 - present The degree of correlation in price action between the so-called "meme" stocks displayed above suggests massive manipulation. Such manipulation is obviously not in keeping with "protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation". Regulation should be in place to prevent this type of activity, but the fact that it has persisted for at least the calendar year of 2021 suggests either that there are not sufficient rules, regulations and laws in place or that they are not sufficiently enforced by the SEC to "deter future misconduct". Either way what is evident is that entities have amassed disproportionate power and influence over the market. While any of the meme stocks would suffice Gamestop is the prime example of what happens when entities gain too much power and influence over the market. Major investment firms, one of which in particular has a major conflict of interest as a major market maker, have bet heavily against Gamestop after their outdated business model showed signs of potential financial collapse due to the pandemic taking a toll on their earnings. While shorting is a relatively long-standing practice of Wall Street the implementation of advanced trading technologies has given market makers and investment firms unparalleled control over the price action of securities. This control in addition to very lax regulation and control of concurrent failure-to-deliver's (FTD) and darkpools has enabled these entities to engage in price control practices that are unethical as clearly shown in the images of this email. These firms have committed rampant, egregious and supposedly illegal "naked shorting" of Gamestop as recently reported by SEC Chairman Gary Gensler. Naked shorting and essentially uncontrolled failure to delivery of shares has produced counterfeit shares. These are being sold on lit exchanges in order to increase sell pressure to overcome retail investor buying pressure that is coincidentally diverted largely to so-called "dark pools" where price action is delayed and suppressed. One need only look at dark pool trading activity for the above securities relative to non-meme stocks to see that the privilege of dark pool trading is being regularly and systematically abused. While there are likely countless other contributing factors to the abject mockery of free and fair market activity displayed in the images above I am not a finance professional of any sort nor an academic in any relevant discipline. I am not sufficiently well versed to fully describe the workings behind the "trends and developments" I have tried to illuminate in this email. However I have described what I believe are the largest and most influential contributing factors to the present situation surrounding these stocks based on independent research over the last year. The factors that I believe are most necessary to address with improved regulation and enforcement are: 1. Naked Shorting 2. Failures To Deliver 3. Dark Pools I would hope that the committee members of AMAC would be able to take these perspectives on the above trends and developments and advise the SEC appropriately. Signed, James Spark