SEC investigating potential market manipulation with social media stock investing

CHATTANOOGA, Tennessee– The Security and Exchange Commission has stepped in after another stock price is being impacted by social media.

“It’s illegal for an insider to manipulate a stock,” said VP at Barnett and Company, Chris Hopkins.

If social media inspiring stock buying sounds familiar it should, it’s exactly what happen with GameStop a few weeks ago.

“Hardly imagine that there is enough retail invest, enough people putting 50 or $100 in at a time to drive the market up that dramatically. It looks like now, in retrospect, about a half of GameStop were actually made by big institutions,” said Hopkins.

Since then, it has happened to silver and some other stocks of companies most people haven’t heard of.

“Were they just along for the ride with a reading Wall Street bets on Reddit and saying ah, we see something happening here we’re gonna play the game too. Perfectly legal. Or were they behind the scenes posing as Reddit posters and participating in an organized plan to drive the stock up,” said Hopkins.

The SEC has halted trading on mostly unheard of SpectaScience which is another stock being influence by social media. SprectaScience rose about 450 percent despite not filing any reports in years.

“The fact that these are happening on a lot of stocks we don’t know much about kind of lens credence the theory of manipulation,” said Hopkins.

Hopkins said although some hedge funds lost money due to GameStop and other stocks. He said when stocks skyrocket and plummet nearly as quickly many other hedge funds make money and it’s the individual single stock investors who end up losing more proportionally.

“The more you trade the more lose. That’s not investing in speculating. With Robinhood encouraging relatively inexperienced people to trade too much and thereby lose,” said Hopkins.