Are short sales legal? What can I do?

[felialcho]

From SEC,
Are short sales legal?
Although the vast majority of short sales are legal, abusive short sale practices are illegal. Short sales used to manipulate the price of a stock are generally prohibited. Some examples of prohibited manipulation include:

• engaging in a series of transactions to create actual or apparent active trading in a security; or
• depressing the price of a security to induce other investors to purchase or sell the security.

The $50 SP drop is clearly manipulated by organized short sellers and violates the above SEC rules. Without regulations, oil, traditional car companies and affiliates funded investment funds can drive a new competitor out of market with stock manipulation and mis-information, simply because they can lose billions of dollars.

I wonder how to file SEC complaints on this, or if there is any on-going efforts(investigations or class actions against those firms) which I'll be grad to contribute.

 

[mblakele]

There's this: SEC.gov | Report Suspected Securities Fraud or Wrongdoing

 

[neroden]

The SEC has been super lackadaisical about market manipulation for the last couple of decades, but you could give it a shot. You'd probably have to assemble a full dossier of the hit pieces *and* minute-by-minute charts showing the abnormal trading activity (spikes of huge numbers of shares sold in seconds). Even then they'd probably do nothing.

 

[glide]

Is this seriously what people worry about in their free time?

What proof do you have of any improprieties?

 

[neroden]

The phony "news" articles are proof of improprieties. That's documented.

 

[adaptabl]

You may also have to look at Elon's tweets to see if they have a effect on the stock value and if everything sent out is accurate and legal. His tweets can move the markets by millions of dollars. There should be some way of verifying the information. I think this is a very dangerous method of getting information out by a CEO. Most other companies have all news releases verified by a communications and legal team to be sure they are following the SEC rules.

 

[ggr]

You may also have to look at Elon's tweets to see if they have a effect on the stock value and if everything sent out is accurate and legal. His tweets can move the markets by millions of dollars. There should be some way of verifying the information. I think this is a very dangerous method of getting information out by a CEO. Most other companies have all news releases verified by a communications and legal team to be sure they are following the SEC rules.

A few years ago the SEC basically ruled that his tweets were sufficiently widely distributed to be considered real disclosures. That means that they had better be real, because it would be much easier for the SEC to go after him if he made an actual false statement. But bear in mind that "aspirational goals" are exactly that. He's not committing to something, and then looking back if the goal is missed, and somehow turning that statement into a lie. Any official statement can move the market by millions... that is not market manipulation.

 

[nwdiver]

..... TSLA is just on sale; Buy more, worry less...

 

[Leopold Stotch]

Buy time indeed!

 

[Eclectic]

From SEC,
Are short sales legal?
Although the vast majority of short sales are legal, abusive short sale practices are illegal. Short sales used to manipulate the price of a stock are generally prohibited. Some examples of prohibited manipulation include:

• engaging in a series of transactions to create actual or apparent active trading in a security; or
• depressing the price of a security to induce other investors to purchase or sell the security.

The $50 SP drop is clearly manipulated by organized short sellers and violates the above SEC rules. Without regulations, oil, traditional car companies and affiliates funded investment funds can drive a new competitor out of market with stock manipulation and mis-information, simply because they can lose billions of dollars.

I wonder how to file SEC complaints on this, or if there is any on-going efforts(investigations or class actions against those firms) which I'll be grad to contribute.

You'd be wasting your time, and the SEC's time, if you file a complaint without specific facts that show a law was broken. You will need names, dates, specific actions that were taken, etc. What it would take is something like finding a short seller who faked a press release with negative news and sold shares as the stock was dropping. Vague allegations will get you a polite "thanks for reporting, nothing to see here" response.

 

[nwdiver]

And... you realize that covering a short position makes the stock go UP... right?

 

[deonb]

If you want to see a real proven SEC violation, take a look here:

The Rolling Naked Tesla Short

Was a very interesting time indeed.

 

[GeorgeSymonds]

The $50 SP drop is clearly manipulated by organized short sellers and violates the above SEC rules

The drop in share price alone shows nothing “clearly’ other than the net of all the trading is that the shares can be bought for $50 less. A lot of smaller investors got carried away with the 5000 in a week news whipped up by Musk and the ‘we”ll show the shorters” rhetoric and pumped in cash and casually ignored the earlier shut down to be able to burst at 6000 and the quarter average of 2200. Meanwhile those with a cold dispassionate view look at it and think M3 production ramp and current structure is damn ugly fuelled by potential paint shop capacity limits, a tent, stories the tent is more efficient than the original line (just how bad is the original line that took so much cash to build that a thrown together tent is better?) etc. The story behind the 5000 in a week headline is not pretty, even though I rejoice at them actually achieving that goal. Share price, especially Tesla, is built on sentiment and potential, actual production numbers move the dial very little.