Michael Burry Sued for Investing in GameStop? | SEC Investigation

hey everyone kevin here so a lot of

people have been reaching out over the

last hour here because michael bury has

received a subpoena from the sec and now

people are asking me kevin why is

michael berry getting sued why is it

that if you support a movement like

gamestop you get sued but melvin capital

and citadel can get away with

essentially murdering the portfolios of

millions of retail investors why is it

always the suits that get away

but not the bullish ones why do they get

dragged into litigation to where now

michael berry and his investment firm

have to hire a law firm i'm sure they

already have one but hire their

attorneys to represent them against a

involvement with the sec nobody wants to

deal with the sec the sec is not looking

to give everybody gift baskets they're

looking for fault

well i'm going to talk about my thoughts

in terms of what is going on here and

why this is happening

i do want to give you a quick recap

by now you probably already know that

things went crazy on my birthday

with gamestop

uh gamestop on january 28th went

essentially to the moon and uh only

didn't continue its path to the moon

because well retail traders weren't able

to continue the squeeze thanks to

multiple brokerages like robinhood a

weeble and many others restricting the

purchasing of gamestop shares in what

has amounted to one of the largest short

squeezes since the epic 2008 short

squeeze of volkswagen which which also

ironically relates to michael bury

because michael bury is known for the

big short where he saw the madness and

the insanity of the housing market and

bet against the housing market in 2008

which was a housing market propped up

by a substantial amount of fraud and

liar loans

and saw the big collapse coming

he was right about that and so when he

supported gamestop as something that

should not be shorted took the opposite

bet and made a bullish case for gamestop

even though he called the insane ramp up

of two of january 28th excessive he was

a supporter of gamestop

and now

michael bury

is in question with the sec

and so again this is leading to those

questions like why why is somebody who's

supportive of gamestop getting getting

mixed into another case here with the

sec or an investigation by the sec let's

take a look at the documentation here so

michael bury whose bullish stance on

gamestop helped lay the foundation for

the retail investor frenzy see notice

how what bloomberg has even done here

this is uh reported on finance yahoo

finance but it was a first publicized uh

published by bloomberg nothing that

matters so much but anyway uh notice

what they've done they've kind of

actually credited michael bury in part

to some of the reason gamestop is

running uh and this is actually going to

relate very much to what i believe is

happening here uh but michael burry said

friday that he has received a subpoena

from the sec it's important to know this

is not a lawsuit this is just basically

calling you to either provide evidence

in writing or

verbal testimony or some form of

testimony to provide evidence in front

of a court or an investigative body

or both

michael bury tweeted so who got an sec

subpoena over gamestop actually i know

they're on my subpoena with all that's

going on in the world and then of course

this links to a twitter picture that

does not exist because michael burry

posts his tweets and then deletes them

michael bury also has me blocked on

twitter

uh yeah he didn't like the fact that i

uh

sent him an eggplant emoji when he said

he was shorting tesla but anyway

a michael bury by the way also shorting

kathy wood kathy wood by the way also

slapped back saying that michael berry

must not understand innovation

uh but anyway so okay michael burris got

this subpoena what does this mean and

what's going on okay so this is my

opinion because obviously we do not have

all of the details of this investigation

but we do know what the sec does the sec

looks to make sure that there is not

fraud and manipulation and

misrepresentation in our securities

markets this is very very important so

for example this is why the sec has

started looking into stable coins

because when we hear stable coins and

we're told they're valued at a dollar

and there are assets on hand worth at

least the dollar cash on hand worth at

least a dollar cash equivalents then

there better be otherwise that would be

misrepresentation right the sec tries to

provide that sort of confidence to

people so that way they continue to

participate in the market because the

last thing the sec wants is people to

throw their hands up and go that's it

i'm not going to participate in a rigged

market now many of us still believe that

markets are rigged but at least the sec

is trying to do their best to minimize

that now the sec this is an important

phrase here okay write this one down if

you need to this is very very important

and no it is not that the coupon code is

expiring tonight for the programs on

building your wealth but you could write

that one down too the phrase is the

sec's job is to make sure an investment

is a fair investment not necessarily a

good investment notice the difference

you could publish the financial reports

of a horribly run crappy company and the

sec can still approve those

as long as they're true

right as long as they're not fraudulent

now the sec obviously has limitations in

terms of how much how much they can

determine whether things are truth or

fraud they're not full financial

auditors for companies although if you

believe what's happening in china then

you'll also lose a lot of faith in

auditing anyway with evergrand the fact

that you could pass an audit in the

spring and essentially declare

bankruptcy five months later yeah that's

a little sus but anyway take a look at

this if you go to the sec.gov website

they've got a little bit of detail in

terms of market manipulation and uh

specifically what we want to look for

here in my opinion would be a pump and

dump and so they have a uh an example

here of a pump and dump

here we go category one okay so uh worth

taking a look at this so insiders or

promoters obtain

ownership or control of a significant

block of stock or a selected issuer

they then start hyping the stock to the

public to generate artificial interest

in the stock and cause the price to rise

and the company or promoter could

potentially then put out a press release

announcing some form of market moving

news that is not true or without

legitimate basis

and i read these two paragraphs here

about the pump and sort of the dumb

because a lot of what happens with the

sec is they're looking for some very key

things

number one they're looking for things

that are not

true or without a legitimate basis so

for example if you are a day trader and

you're buying something and selling

something well that's a legitimate basis

you're going into something and you're

going out of something

if you are

somebody who uh is investing in a stock

and uh this stock goes up

on news

and then you sell and take profits

that's not pumping and dumping you're

just trading right

but what if now

you look for a micro cap company you

know something that's trading for i

don't know two pennies or something like

that

and then you put out a research report

that says this company just innovated

let's say

it came out with solid state batteries

functioning solidly working solid-state

batteries

kind of like quantum scape that hype we

had initially but they only have lab

tested uh solid-state batteries nothing

actually in a form that we could

actually use or just sort of lab

batteries

well that would probably cause that

two-cent stock to turn into something

very very expensive but if that was

false or misleading or not true

then that would be wrong that's where

the sec comes in and says hey this is my

market manipulation that's when people

get fried that's when people get

arrested they go to jail they get fined

so

why would gamestop

send a subpoena to michael bury

well

two reasons

number one

gary gensler is expected to issue a full

report on what happened on the days

around january 28th between gamestop

melvin

citadel the dtcc all of the the

departments and and agencies or

corporations involved in the madness

that transpired with the game stop short

squeeze where gamestop went from a 40

stock to a 480

8 stock i believe 488 and then fell

right back down to the mid 100s now

sitting around the upper 100s

well my belief is that because this

report is coming the sec wants to make

sure that they show

and provide confidence to society that

they have fully investigated every

possible angle related to the s

or the game stop short squeeze

and if there's somebody with a

reputation like michael berry for making

big bets somebody who has

you know about two and a half percent of

their fund invested in gamestop

then it would make sense and somebody

who's been publicly vocal about

supporting the gamestop uh you know push

in the valuation of gamestop then it

would make sense that

gary gensler the chairperson the sec

would at least want to rule out any

potential for manipulation or untrue uh

you know pumping essentially and then

potentially was there any dumping was

there any selling hey let's see evidence

let's see evidence of your trades let's

see evidence of your analysis why did

you make the purchase why did you sell

uh what research do you believe in

whatever really uh and and this is then

an opportunity for the sec to include in

their report which i will be going

through with a very fine fine comb to uh

to sort of analyze hey what the heck

actually happened in the eyes of the sec

and i would expect that the sec is going

to look at michael bury and provide

evidence that hey look here's somebody

who fundamentally believed in the value

of the stock just like deep f in value

fundamentally believed in value of the

stock talked about that saw the excesses

uh that happened but still held on and

there you go that's it that puts the

michael bury issue to rest i really

think this michael bury issue is just

about making sure that all of the bases

are covered i don't personally believe

that michael bury did anything wrong

even though i sent him an eggplant and i

think it was wrong that he blocked me i

don't think he did anything wrong by

fundamentally supporting gamestop and if

anything i actually see this as a good

thing i see this as the sec making sure

they're covering their bases they're not

leaving any stone unturned uh i think

michael berry will be totally fine

probably going to cost them some money

obviously to go through this in a

protected manner and then we'll all be

back to watching for michael bury's next

big short which keep in mind while his

rk big short might not pay off super big

he is also shorting the treasury's

market and the latest announcement from

the federal reserve on tapering

that's going to print some attendees for

michael berry short of the bond market

so hey michael bury if you're watching

this unblock me

or don't i don't care thanks everyone so

thanks so much for watching consider

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folks we'll see in the next video thanks

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