Welcome back to the channel everyone today i want to talk about the department of justice investigation into predatory short sellers and how that impacts, amc and gamestop. I also want to talk about the november inflation data. That's just been released, so stay tuned and let's make some money - and i want to dive straight in with the key information. So hedge funds are ensnared in an expansive department of justice probe into short selling.

The us justice department has launched an expansive criminal investigation into short selling by hedge funds and research firms, scrutinizing their symbiotic relationships and hunting for signs they improperly coordinated, trades or broke other laws to profit. The probe run by the department's fraud section with federal prosecutors, in los angeles, is digging into how hedge funds tap into research and set up their bets, especially in the run-up to publication of reports that move stocks just like how iceberg research came up with their phony Amc report - and i bet tons and tons of hedge funds were shorting just before that report. Authorities are prying into financial relationships between hedge funds and researchers and hunting for signs that money managers sought to engineer startling stock drops or engage in other abuses such as insider trading. Now you may remember from this interview with jim cramer.

He spoke all about how he coordinated phony research and phony reports in order to purposefully drop stocks for his benefit. I've also spoken a number of times on my channel about the short sellers, playbook or basically, a shortened distort scheme where hedge funds and institutions spread rumors about a company in order to crush its stock price, whether that's rumors on a company going bankrupt or running into Regulation problems or a new share issue of stock, split tons and tons of different methods that they use in order to crush a stock's price. Maybe they'll spread rumors about the ceo or the cfo and how they're leaving the business and how this is terrible for the company or to encourage other investors to sell. I their shares currently giving away an iphone 13 pro every single day this month until christmas.

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The us probe opens yet another front in an already treacherous era. For those who tried to profit on stock drops some bearish funds threw in the towel as government stimulus void prices during the pandemic, that pressure intensified as retail investors organized counter-attacks on popular short targets. Building up shares to inflict losses on hedge funds earlier this year. Meanwhile, companies criticized by short sellers, have become increasingly bold in firing back, sometimes launching legal battles, even as they face government probes that ultimately support short sellers thesises.

So, interestingly, i'm going to talk a little bit later on the gamestop fcc investigation, which also the sec are currently investigating amc. But the sec may have just reached the end of their line and have now referred that investigation onto the department of justice, because maybe they found some abuse in the short selling on gamestop and amc still successfully bringing charges against short sellers could be challenging. Given that betting against companies and publishing research believed to be accurate, is lawful and even beneficial for markets, government attorneys are trying to determine whether short sellers engaged in some form of deception say, for example, a short distort scheme. The justice department unit handling the inquiry already has a formidable reputation on wall street.

It recently bought several cases against global banks, so not just small firms, but the big dogs as well, and traders for illegal spoofing of precious metals and treasury futures. As part of that probe, jpmorgan chase paid more than 900 million dollars in penalties after its traders placed and cancelled orders for commodities to benefit positions held by the bank or prize hedge fund clients. Now, the only downside to this investigation is that it came many years after the event had actually happened, and also nobody ended up going to jail. Jp morgan just paid a small fine of 900 million dollars.

However, hopefully, with this investigation into predatory short selling, people will actually go to jail. Dave, lauer, just tweeted, saying wow, big news just came across bloomberg, predatory short selling is a scrooge on markets and must be addressed. Let's see the feds finally step in and enforce the rules and laws, he said these short sellers often identify vulnerable firms and target them with a mix of press leaks, regulatory tips which aren't tips and market manipulation. He said i've seen and studied this directly.

These activities are anti-ethical to free markets and destructive to otherwise good businesses. He said it's about time that the department of justice stepped in here. The sec has proven ineffective at enforcing its rules, and fines do not do the trick. We need to see real repercussions to this behavior bar people from the industry and send them to jail.

Fines are just the cost of doing business, so darren, harper, tweeted, saying this is timing. The announcement of the department of justice probe comes right. After gamestop affirms the investigation of their shares by the sec, he says this could be related. Maybe the sec is cooperating with the department of justice.

So let's talk about that now, as i said earlier, i also want to talk about the sec, giving their ongoing investigation into gamestop and amc over to the department of justice. Therefore, potentially proving the float was over 100 owned, even back in june, with a specific wording used by the sec in their recent foia response. They may as well have just confirmed that the raw vote count in june was greater than the number of shares outstanding and that the department of justice is actively investigating naked shorting on gamestop and amc and pursuing criminal prosecution. This poster basically predicted the sec's response.

A few weeks ago, he assumed they'd say something confirming the existence of naked shorts and their ongoing investigation, and he says that you basically got it right almost word for word. He says, as you can see, their response matches almost exactly what i said. We would need to see in order to confirm the conclusions drawn in my last due diligence. He did a search for the phrase, locate or identify in all of the sec's foia documentation, and it appears only once in the same section where it describes the only circumstance in which he consults with the department of justice before releasing information and obviously as an update.

As multiple users have pointed out, bloomberg just put out a release shortly after i posted this due diligence about a department of justice probe into predatory shorting. Basically, this guy's, assuming the sec investigation into gamestop and amc, has been passed over to the department of justice and they will investigate amc and gamestop as part of their investigation into predatory short selling. Maybe the sec found something in their investigation into gamestop and amc about how billions of synthetic shares exist and the float count was way higher than it should be, and therefore they've had to pass it over to the department of justice. Now also, i wanted to quickly cover adam aaron and the cfo of amc selling their shares and what this really means.

Adam aaron held 400 000 shares of unrestricted stock, and he also held 3.3 million shares of unvested restricted stock around the quarter. Three earnings he filed to set up 1.25 million shares to be sold and managed by a third party. These shares are going to be sold in set intervals, and this is something he's been planning and has had organized for a number of years. Now obviously, adam aaron's not getting any younger and he does need to sell off his shares at some point for family wealth to give to his children, so they actually have some money for the rest of their lives now.

This is obviously something he's been planning for. Many many years now and he actually put this plan in place some time ago, with jp morgan in charge of selling off those shares he sold off. Half of that amount, 625 shares after the filing in quarter three, and that leaves him obviously, with another 625. 000 shares still in his structured plan that can be sold in the future.

Today he sold another half of that amount, so another 325 000 shares leaving him with another 325 000 shares that he can still sell. As part of that already announced, structure of share selling and therefore adam aaron isn't deciding to dump amc stock because it's falling. This is something that's been in place for a number of years and something he's been planning for a very long time. So the cfo of amc, sean goodman, is 55 years old and therefore also likely has kids that he wants to provide some money to.

On top of this, sean goodman still holds around 33 000 shares of amc, valued at nearly a million dollars over the last five years. He's sold 9.45 million dollars worth of amc. Therefore, sean goodman basically sells amc shares every single year, at least once or twice a year, and therefore this isn't something randomly out of the blue, where he's dumping all of his shares into the market. This is something he does every single year, just to get some more money to provide to his kids again.

This isn't something he's doing dumping his shares, because amc is falling. This is something he times every single year. Does it about the same time again just to have some more money for christmas, probably now? Finally, i also wanted to talk about the november inflation data. That's just been announced today.

Annualized inflation for november was 6.8, that's obviously higher than october 6.2, higher than september's 5.4 and is, without a doubt, the highest inflation rate we've seen since the 1980s. This puts the average annualized inflation for 2021 at 4.5 way higher than the inflation that we saw back in 2008 are only 3.8, we're currently running an average inflation rate higher than any single year in the early 2000s and higher than any inflation we've seen since the 80S and the 90s - this is obviously very very concerning that inflation hasn't capped at 6.2 percent and started to come down. No. Instead, it's actually still going up.

This just goes to show that the market is in a horrendous position at the moment, very, very heavily. Over leveraged and inflation is uncontrollable at the moment, guys be sure to. Let me know down in the comments below what you think about the new department of justice, investigation into amc and gamestop and other predatory short selling. And if you want to stay up to date with all of my new stock and crypto picks or if you just want some help with amc and gamestop, be sure to check out the patreon and the private discord linked in the description below and become part of, The team, and as always guys if you enjoyed this video, be sure to check out some of my others, alternatively, subscribe to the channel and bring that notification bell, because that way, you'll be alerted.

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