Progressive Rep. Ilhan Omar (D-MN) just said prison time is in order for any Wall Street short-sellers who may have had a role in blocking the public from purchasing shares of select companies this week as prices soared well beyond expectations, Fox News reported.
According to reports, companies including GameStop, Nokia, and AMC found themselves the center of controversy this week when social media users piled on to drive up stock prices and squeeze out short-sellers. According to USA Today, short-sellers turn a profit by selling “borrowed” shares in the hopes that the stock’s price will go down, allowing the investor to later purchase those borrowed shares at a lower price than they’d already sold them for.
It’s an investment strategy that can be controversial — and costly, particularly if the price of the stock goes up after the short-seller has already made their sale. In that case, the investor is forced to ultimately purchase that stock at a higher price than they sold it for, and the only option is to eat the sometimes massive loss.
“Send them to prison”
Such a scenario is exactly what users on one Reddit forum were hoping to bring about when they rallied the public to buy shares of GameStop and other entities targeted by short-sellers like the hedge fund Melvin Capital. But as stock prices for these companies soared, cutting heavily into short-sellers’ pockets, brokers like Robinhood and TD Ameritrade started cutting investors off from making additional purchases, reports revealed.
After reaching record highs, shares of GameStop “tumbled” in price Thursday after Robinhood’s move, which prompted outrage on both sides of the political aisle, USA Today reported.
Among those speaking out is Rep. Omar, who suggested in a tweet Thursday that if “anyone on Wall Street” had “used their power” to force the trading platforms’ hands in an effort to minimize their own losses, they should be behind bars.
“Americans are told to invest in the market,” Omar wrote, according to Fox. “But when they start to threaten the profits of billionaires, strange things happen.”
She went on: “If anyone on Wall Street with short positions in particular stocks used their power to cut off the public from buying those stocks, send them to prison.”
“A rigged system”
And Omar’s not the only one. In a rare showing of unity, both Republicans and Democrats on the Hill called for investigations into the controversy, which dominated headlines throughout the latter half of the week.
“Gotta admit it’s really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino,” Rep. Alexandria Ocasio-Cortez (D-NY) remarked in one tweet, according to Politico.
Her message was later shared by none other than Sen. Ted Cruz, a Texas Republican who said he “fully” agreed with AOC, Politico reported.
Donald Trump, Jr., the former president’s son, also chimed in. “It took less than a day for big tech, big government and the corporate media to spring into action and begin colluding to protect their hedge fund buddies on Wall Street,” he wrote in a tweet, according to Politico. “This is what a rigged system looks like, folks!