Hi all,
I happened to find this on the inter-web. Does any of this sound familiar to you?
Mr Keyser, Mr Rad?
Social media Manipulation:
We covered this extensively in the first piece, but in the past, Anson has drawn regulatory ire for its manipulation of stocks through social channels such as Facebook, Twitter, Stockhouse, Yahoo, Reddit and other platforms.
The rumors are that Anson received a slap on the wrist and a pathetic fine over this and was then told not to do it again.
Well, Anson has done it again. They currently have 3 full-time people who used to sit in a very plush space in Anson’s Toronto offices, dedicating their entire day to bashing companies through these various channels. We understand that they do not do this through Anson servers; rather, through mobile routers and VPNs so nothing can be traced. (Regulators are going to have to step up their digital game because this is VPN 101).
We have recently learned that their social media bashing squad has been moved from the Anson offices since they were outed by someone else online.
Anson Funds utilize Water boarding style trading tactics …
At their core, algorithms and programmed trades are a set of steps or instructions that a computer uses to execute BUY / SELL orders. These can vary from very complex instructions comprised of thousands of lines of code to more basic and straight forward rules. Anson Funds have fully embraced this new way of trading and use it to their advantage.
One area that Anson utilize with almost all of their short positions is the abusive use of program short sale algorithms. They use this to create a nearly impenetrable ceiling on a stock that is nearly impossible to clear and prevents the share price from moving higher. For example: Company ABC trades at $10.00 and averages 500,000 shares a day. A short seller has the ability to place multiple SS algo orders through various brokerage firms that makes it next to impossible to increase the share price in that window. If the seller were to enter 3 separate orders of 150k shares with a lower sell limit, say $9.80 they have effectively offered a single days total volume to be sold in a slow drip fashion that would surely pressure the share price lower.
These types of orders are easily spotted as they usually show a very small amount of stock on the offering side; between 100 – 1000 shares at a time and continue to reload and follow the market as it moves up or down while making sales along the way. This small train of mini sell orders follow the share price until it reaches the instructed limit. If the intent is to make the shares decease in value and the stock does not react how the account desired, they can amend the program by either lowering the limit or increasing the size of the orders. (maybe both). In many cases this is suffocating to the share prices as it slowly grinds lower.
Many in the industry have considered this a form of capital market water boarding; and Anson does not let up until somebody gives in. WHO?
Either the company agrees to cover their short with a financing or the shareholder base capitulates and begins to sell their position as it appears to them that there is an issue with company and the stock is preforming poorly. They use this laddering approach to bring great harm to the companies they attack.
This kind of activity kills small cap companies. They do not stand a chance against a sustained attack of this kind. Companies bring in volume and everyone is of the misguided belief that volume will solve the problem – it will crush the shorts. But that is not the case – they just up their short more. So if they were short 1 million – they just go short 1.5 million. You can see this on the pre-bids too. If you bring in $1 million of buying in the bid side – they will match it on the ask side.
This strategy is employed once Anson has established a short position and is used to place the stock in a particular range or an attempt to break long shareholders and have them sell their shares at a much lower level where Anson would be looking to cover.
You do not stand a chance. If you have experienced this in your stock and can’t explain why – this is Anson Funds destroying your quote and there really is very little you can do about it. A number of companies we have spoken to said they have recorded all illegal trading activities and sent then to the exchange and regulator and nothing has happened. Sadly nothing probably will happen in Canada until there is real political will to make the marketplace a free and fair place to invest and trade.
Another good kickoff point would be this article here. Confessions of a paid basher:
https://www.investorvillage.com/smbd.asp?mb=445&mn=25514&pt=msg&mid=1288319
Its clear these guys that are on morning, noon, and night have a motive.
Is it a quick smash and grab during a lul in the sector? Tax loss?