A small but vocal group of Redditors has taken umbrage at the Securities and Exchange Commission’s latest attempt to “educate” retail investors.
Meme-stock traders on subreddits like “Wall Street Bets” and “Superstonk” are complaining that the latest entries in the SEC’s “Investomania” series of YouTube videos are insulting and even hypocritical. CNBC showed one of the videos earlier this week, perhaps helping to trigger the backlash.
In a thread entitled “A Message to the SEC”, one Redditor said the “entire market is a meme stock,” while claiming the agency has allowed dark pools and algorithmic market makers to continue tilting the market to their advantage, but leaving retail traders without adequate information to compete effectively.
“The whole entire market is a meme stock, to label small-mid cap stocks as meme stocks is manipulation in itself through fomentation. If the SEC did any research, they would know that most of the ‘meme stocks’ were pump and dump via Silicon Valley algorithms and hedge funds to regain liquidity from their short position losses and risky bets,” wrote the Redditor “Thorbeans.”
The SEC’s videos, apparently paying homage to American sketch comedy shows like “Saturday Night Live,” depict a group of young people competing in an imaginary game show entitled “Investomania.” One contestant who chooses to invest in “meme stocks” sees all his money disappear before being rewarded with a pie to the face.
A second video pokes fun at investors who bought cryptocurrencies that were endorsed by celebrities. A few years ago, the SEC warned celebrities several times not to continue shilling digital coins.
SEC warns investors about buying cryptocurrencies based on celebrity endorsements
The videos close with the same voice over: “Investing is not a game, always do your research before making an investment decision. Learn more at investor.gov.”
While the videos were intended to engage retail investors, the SEC opted to turn off comments on the videos. The agency didn’t respond to a request for comment.
In more than 800 replies to the original Reddit thread about the videos, users hurled insults at the SEC. One claimed that the video “makes me want to double down on meme stonks.”
A repost of that thread on “Superstonk” — a subreddit dedicated to trading “meme stocks” like GameStop
— elicited hundreds more replies, with one user complaining that the video was “proof that their system does not work without retail money.”
Another joked: “My only complaint is that Janet Yellen didn’t appear at the end and shout ‘That’s all Folks!’”