The SEC alleges that more than $700,000 was illicitly raised through a clearing scheme offering market-maker discounts. Two defendants, Suyun Gu and Yong Lee, are said to have traded 11,400 and 2,300 meme stocks in February alone. Announcing that it provides 62% of its revenues with DOGE, Robinhood is also among the platforms used. Here are the details…
Two people doing manipulative DOGE transactions are on the SEC radar!
The United State Securities and Exchange Commission has sued two Robinhood users who used meme coins and engaged in manipulative transactions. According to a complaint filed on Monday, defendants Suyun Gu and Yong Lee took advantage of different transaction fee schemes offered by different individual investors and exchanges to obtain arbitrage while creating fraudulent transactions. By trading between locations that offer discounts to market makers and those that do not charge a fee to market takers, the SEC estimates that they have achieved a total of more than $1.5 million in discounts through their so-called wash-trag scheme.
They are said to be able to keep almost half of the discounts as profit
According to commission estimates, they made a profit of $668,671 and $51,334, respectively, while making a series of fictitious transactions in the February-April period of this year. The pair is believed to have made 11,400 and 2,300 trades, respectively, through the program. Two defendants are accused of targeting put option links for a series of popular meme stocks, including GameStop (GME) and AMC Entertainment (AMC). According to the complaint:
Gu and Lee believe that other stock market participants’ interest in buying “breast stocks” and the associated price increases will make put options on this series of stocks less attractive and easier for Gu and Lee to trade among themselves.
Although the trading locations that Gu and Lee used are not explicitly mentioned in the court documents, the couple appears to be using the popular free investment app Robinhood. The documents state that Gu drafted the plan after watching the CEO at “Broker-baler B” in a February court statement that his company was not charging commissions from its clients (Robinhood CEO Vlad Tenev with GME and other meme coin senedollars series before Congress). the month in which he testified about relevant market fluctuations).
DOGE accounts for 62% of Robinhood revenues!
Robinhood was the subject of controversy in January after the platform halted trading on the GME due to its notorious short-term squeeze against hedge funds run by the fiery Reddit community r/Wallstreetbets. The group responded by immediately getting close to crypto, with Dogecoin (DOGE) pumping 980% on Jan. 28 – the day Robinhood took action to quell crazy meme stock speculation. Robinhood has since estimated that Dogecoin accounted for 62% of crypto revenues in the second quarter.