SEC Inattention to GameStop Manipulation Proof of Double-Standard Favoring Celebrities

GameStop surges after meme stock investor ‘Roaring Kitty’ resurfaces online.

After a three-year slumber, Keith Gill aka Roaring Kitty, resurfaced on Twitter to promote GameStop stock. The resulting hype, harkening back to the ‘meme stock’ days of 2021, sent GameStop shares surging as high as 100% on heavy volume, and then as much as 50% the next day, from $20 to as high as $60. After a second 16-day hiatus, he returned to disclosed a $200 million position of GameStop, causing GameStop stock to surge 30%.

GameStop (GME) stock surged 21% on Monday after user “DeepF***ingValue, an account believed to be tied to individual investor Keith Gill — who ignited the meme stock rally back in 2021 — posted a screenshot on Reddit late Sunday that purported to show they paid nearly $175 million building a position in the video game retailer.

So what was the point of all those Congressional hearings and investigations by SEC in 2021? Much ink was spilled that this was a crisis of market manipulation. Stern words by Congress where exchanged with the implicit promise it would not happen again. Mr. Gill was forced to testify–that is how serious it was. And lo and behold, three years later, the same individual is allowed to manipulate the same stock as if nothing changed? Analogous to a world-class surgeon transplanting organs to a dead patient, the procedure was a success; the outcome utterly futile.

It’s obvious Mr. Gill is manipulating the price of GameStop for personal profit, yet the SEC does not care. Or there is a double-standard. Celebrities are allowed to skirt the rules. Sometimes they appear like they are in trouble, but that is part of the theatre. They never actually face material consequences for their actions (e.g. prison or disgorgement). Unknown, small-time market manipulators are fined or jailed, but not famous people. This is also why no celebrities have been charged for promoting fraudulent NFTs, yet non-celebrities have been charged and arrested for similar scams.

It can also explain how Trump has not been negatively personally affected by his many indictments, charges, and convictions. This also throws a wrench into the ‘deep state’ narrative. Why would the deep state leave Trump alone, who is a major threat, yet someone like Sam-Bankman-Fried, who was a major donor to Democratic causes, was held to the letter of the law and got 25 years. Maybe Sam’s mistake was not breaking the law but, but rather not being famous enough. If anything, this is confusing. Maybe the deep state is using Trump as a honeypot or canary of sorts. Trump is useful to keep around as a tool to entrap those who are an actual threat.

Unless it involves the existence of alleged WMDs, protesting the outcome of a certain election, or the occasional bad actor going to jail, it’s all just performance or Kabuki theater. Retail investors will continue to be hosed, and the same individuals and communities allowed to collude to manipulate prices.

I am agnostic about this for the most part; if someone wants to waste their money in the faint hope of ‘meme stock’ riches, that ought to be their right. But then what role does these agencies serve if they only selectively enforce the rules, or are powerless to do so? If this is how it is, why are taxpayers even paying for a regulatory agency or Congress’ salaries if the same actors are allowed to repeatedly–like in 2021 with GameStop and again in 2024–make a mockery of the process with impunity. Either have agencies or don’t have them.