The SEC filings show Musk’s transactions occurred between August 5 and August 9, shortly following the electric vehicle company’s 2022 annual shareholder meeting on August 4 in Texas.

Previously, Musk had announced on social media that he had “no further TSLA sales planned” after April 28. 

The CEO’s latest stock move has prompted supporters of the EV brand to question if Musk is now truly finished selling Tesla shares and if he might repurchase the shares in the future. 

In response, Musk said, “Yes. In the (hopefully unlikely) event that Twitter forces this deal to close and some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock.”

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In a statement to the US Securities and Exchange Commission (SEC), Musk’s representatives said Twitter had breached the terms of the agreement and “appears to have made false and misleading representations.”

They claimed the social media giant also failed to provide requested data to enable Musk to "make an independent assessment of the prevalence of fake or spam accounts" on the platform.

“Sometimes Twitter has ignored Mr. Musk’s requests, sometimes it has rejected them for reasons that appear to be unjustified, and sometimes it has claimed to comply while giving Mr. Musk incomplete or unusable information,” the statement read.

Musk’s withdrawal from the deal saw shares of Twitter drop by 7% in extended trading.

The deal’s terms require Musk to pay a $1 billion fee if he fails to complete the transaction. However, Twitter’s board is planning to take legal action against Musk instead of accepting the $1 billion fee. 

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Gensler’s plan would require trading companies to compete directly to execute trades from retail investors, thus increasing competition. 

The SEC plans to scrutinise the controversial payment for order flow practice which sees some brokers paid by wholesale market makers for orders. 

Gensler said the new rules would push market makers to disclose more data on how much these companies receive in fees as well as the timing of trades in favour of investors. 

“I asked staff to take a holistic, cross-market view of how we could update our rules and drive greater efficiencies in our equity markets, particularly for retail investors,” Gensler told an industry audience on Wednesday.

The announcement by the SEC is one of the largest shake-ups of US equity market rules in recent times. It will probably lead to formal proposals in the Autumn, with the public given the opportunity to consider them before a vote by the SEC takes place.

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On March 28, the bank disclosed that it had exceeded a US limit on sales of structured products. This triggered a loss and a potential restatement of Barclays’ 2021 accounts.

Barclays’ new CEO, C.S. Venkatakrishnan, has reportedly said that the bank found no evidence to date of deliberate misconduct relating to the blunder and that Barclays was cooperating with all relevant regulators. 

On Thursday, the bank said it planned to begin the $1.25 billion buyback “as soon as practicable” after resolving the situation with the US authorities. 

“Barclays believes that it is prudent to delay the commencement of the buyback programme until those discussions [with the SEC] have been concluded,” Barclays said. 

“Barclays remains committed to the share buyback programme and the intention would be to launch it as soon as practicable following resolution of filing requirements being reached with the SEC and the appropriate 20-F filings having been made.”

According to filings made to the US Securities and Exchange Commission (SEC), Musk, who regularly puts out controversial Tweets, has taken a 9.2% stake in Twitter at the cost of $2.89 billion on Friday. 

Following the news, Twitter shares soared as much as 26% in pre-market trading, adding over $8 billion to its $31.5 billion market value prior to Musk’s interest being made public. Following the stock price jump, Musk’s shares are now worth approximately $3.6 billion. 

At the end of last month, Musk had said he was giving “serious thought” to creating a new social media platform after remarking that Twitter doesn’t allow for free speech. In a Tweet, the billionaire said, “Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?” 

Some analysts predict that Musk’s shareholding could lead to him taking an active interest in the social media platform which may result in a buyout. 

“We would expect this passive stake as just the start of broader conversations with the Twitter board/management that could ultimately lead to an active stake and a potential more aggressive ownership role of Twitter,” said Dan Ives, an analyst at Wedbush Securities.

Maxim Manturov, Head of Investment Research at Freedom Finance Europe, explains what retail investors should know as the “meme stock” movement continues to thrive. 

The key to success is to understand the motivations behind emotional investing and to avoid both euphoric and depressive investment traps that can lead to bad decisions. The investor psyche can overpower rational thinking during times of stress, whether the stress is caused by hype or panic. To capitalise on market euphoria or frightening events, it is critical to take a rational, realistic, and strategic approach to investing.

With this topic in mind, below I explore the rise of the “meme stocks” movement, and whether investors should look to capitalise on this growing trend or steer clear of impulse buys. 

What is the "meme stocks” movement?

“Meme stocks” are stocks of companies that have recently seen a sudden surge in trading activity, usually supported by online social media platforms such as Reddit and Twitter. The hype surrounding a particular stock encourages retail traders to invest, knowing that its share price will likely rise and do so quickly. In addition, the “meme stocks” exchange community often favours stocks with high, short-term gains. By forcing everyone who sold the stock to cover their short position, this leads to further stock growth overall.

The term “meme stock” originated on the Reddit online discussion forum, where a sub-Reddit known as WallStreetBets became heavily popular. Towards the end of January, the users of WallStreetBets criticised large financial institutions and hedge funds for constantly 'shorting' the shares of distressed companies such as GameStop and AMC Entertainment. This led to retail traders buying large quantities of shares in these companies, taking advantage of the ‘buy and hold' approach.

Following this surge, news of the short squeeze spread across various social media platforms, attracting a lot of attention from investors across the globe, even to the point where the phenomenon came to the attention of the SEC. This resulted in certain hedge funds and brokers who worked with them making some pretty hefty losses.

Should investors look to participate in this growing trend? Or is it important that they do not get sucked in by impulse buys?

It is important to remember that “meme stocks” are nothing more than speculation. Essentially, it is not worth allocating large sums to these trades, given the stock's volatile behaviour or unsubstantiated valuations backed only by information noise. In the long term, the company fundamentals will matter a lot, and after a short squeeze rally, the prices can easily go down as fast as they went up, so it is worth acting with caution and being aware of all the risks.

Has the "meme stocks" movement impacted the global stock market as a whole?

The movement of “meme stocks” has more to do with factors brought about by the pandemic. Historically low interest rates and incentives, as well as high levels of liquidity in the markets, combined with increased leisure time and self-isolation, provoked many people to enter the stock market for the first time. In addition, the increasing availability of zero commission accounts and trading apps for millennials contributed immensely to the growing trend. 

Over one million new online brokerage accounts were opened in Q1 2020 alone, with equity trading becoming one of the most popular applications for Covid's incentive cheques in the US. Yet, the retail investment boom is not unique to the US. Almost all major stock markets have seen similar trends, with local trading applications becoming more widespread. 

What does the future hold for meme stocks? Will the movement last?

The future of the “meme stocks” movement will depend on the fundamental reasons for its emergence in the first place, including liquidity levels in the markets, interest rates, and monetary policy. Without these components, the rise of “meme stocks” might have never happened in the first place. As such, while it is likely that this theme will continue to exist, it will not move at such an incredible scale as in January with Gamestop and AMC stocks.

What are the top five “meme stocks” to watch out for in 2021?

While it is clear that investors should avoid impulse buys, with the right level of research and precaution “meme stocks” can result in profits for more experienced buyers. So, what are the top “meme stocks” that investors should watch in 2021?

1. Through its subsidiaries, Alibaba Group Holding Limited (BABA) provides technology infrastructure and marketing opportunities for merchants, brands, retailers, and other businesses to engage with users and customers. It operates in four segments: Core Commerce, Cloud Computing, Digital Media and Entertainment, and Innovation Initiatives. It is sitting at about 72% upside to the average target price of $246.

2. ContextLogic Inc. (WISH) operates as a mobile e-commerce company in Europe, North America, South America, and other areas across the globe. The company operates Wish, a platform that connects users with merchants. It also provides marketplace and logistics services to sellers. The company was incorporated in 2010, at about 92% upside to its average target price of $9.2.

3. Palantir (PLTR) is a software developer that specialises in big-data analytics. The company recently announced that the US Army's Intelligence Systems and Analytics Program Manager has selected PLTR to provide the data framework and analytical foundation for the Capability Drop 2 (CD-2) program. As a result, the software firm has been selected to advance the next phase of the Army's $823 million indefinite-delivery contract, with an approximate 23% upside to the maximum target price of $31.

4. PubMatic (PUBM) provides a cloud infrastructure platform for digital advertising that enables real-time advertising transactions. The company was founded in 2006 and today operates 14 offices and eight data centres around the world, at about 97% upside to its average target price of $46.

5. NIO Inc. (NIO) designs, develops, manufactures and sells intelligent electric vehicles in China. The company offers five, six, and seven-seat electric SUVs, as well as smart electric sedans. It also provides energy carriers and service packages to its users; marketing, design and technology development activities; production of electronic powertrains, batteries and components; and sales management and after-sales service activities, at about 88% upside to the average target price of $63.8.

On Friday morning, bitcoin was up 2.5% to trade at $58,884. The cryptocurrency’s all-time high currently stands at around $62,000, which it reached back in April of this year. The world’s second largest crypto by market cap, ethereum, was up by around 4% to trade at $3,753.

While the SEC is yet to make any comment, there has been widespread speculation on the SEC approving bitcoin ETFs, prompted by a tweet posted by the SEC’s investor education office on Thursday. The tweet said, “before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits.”

Meanwhile, Bloomberg reported that the SEC “is poised to allow the first US bitcoin futures exchange-traded fund to begin trading in a watershed moment for the cryptocurrency industry”, with the article citing people familiar with the matter.

Gensler told Barron’s that the payment for order flow — the backend payment that brokerages obtain for directing clients’ trades to market makers — has “an inherent conflict of interest”. 

For trading platform Robinhood, payment for order flow is one of its largest revenue sources. It is currently how the platform is able to provide zero-commission trading. Yet, payment for order flow is controversial and has amassed attention from Main Street and the Financial Industry Regulatory Authority. For several months now, Gensler had said that a ban on payment for order flow is an option that the regulator could look to introduce. As a possible alternative, the SEC has said it would also consider better defined and more rigorous brokerage disclosures.

In January, Robinhood was forced to limit trading on certain securities after a short squeeze in GameStop’s stock. This saw Robinhood’s CEO Vlad Tenev testify to the US House Financial Services Committee in February. Legislators condemned payment for order flow for the conflict it has with market makers. 

However, Robinhood has previously said that it believes payment for order flow is a better deal for its customers in comparison to the old commission structure. The trading platform says that if the payment for order flow model changed, the brokerage and the wider industry would be capable of adapting. 

New US Securities and Exchange Commission (SEC) chief Gary Gensler took over the role in April and has since expressed that he wants to see more regulation of cryptocurrency in order to protect consumers. Gensler says that the nation has a duty to protect investors against fraud. 

Naeem Aslam, chief market analyst at Avatrade, has pinned bitcoin’s price drop on Gensler’s recent comments. Just before 9am in London, bitcoin was down 3.8% to $38,587. The drop saw a return to levels seen last Friday, before a weekend rally pushed bitcoin over the closely-watched figure of $40,000. 

As he is one of the very few experts on cryptocurrencies amongst international financial regulators, Gensler had been marked as a potential booster for the industry by cryptocurrency enthusiasts. As such, the drop in bitcoin comes as a particular disappointment to many.

Fintech company Ripple said on Monday that it expects to be sued by the Securities and Exchange Commission (SEC) for allegedly violating laws against the sale of unlicensed securities when it sold XRP to investors.

The SEC is planning to name Ripple CEO Brad Garlinghouse and co-founder Chris Larsen as defendants in the lawsuit, Garlinghouse told Fortune. In his remarks, he described the suit as “fundamentally wrong as a matter of law and fact”.

“XRP is a currency, and does not have to be registered as an investment contract,” the CEO said. “In fact, the Justice Department and the Treasury’s FinCEN already determined that XRP is a virtual currency in 2015 and other G20 regulators have done the same. No other country has classified XRP as a security.”

The SEC has been plain in recent years that it considers Bitcoin and Ethereum to be cryptocurrencies and not securities due to their decentralised nature, though the more centralised XRP – the world’s third-largest cryptocurrency – has not received a clear designation.

If XRP is found to be a security it will be brought under new restrictions that would likely have a significant impact on Ripple, which owns 55 billion of the total 100 billion XRP tokens that exist. Part of the company’s quarterly revenue stems from the sale of its XRP holdings.

Ripple is backed by a range of financial services giants such as Japanese financial firm SBI Holdings, Spanish bank Santander and a range of venture capital firms including Lightspeed, Andressen Horowitz and Peter Thiel’s Founders Fund. The company was last privately valued at $10 billion, and XRP holds a market cap of over $20 billion.

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SBI Holdings CEO Yoshitaka Kitao said that the firm would continue its partnership with Ripple as it looks to expand further in Asia. “Japan’s FSA has already made it clear that XRP is not a security,” he said. “I’m optimistic that Ripple will prevail in the final ruling in the US.”

XRP responded negatively to news of the impending lawsuit, falling more than 17% to hover around $0.46 on Tuesday morning.

Laws governing financial crimes within the market haven’t always been as quick to catch up with the trend of crimes themselves, as has law regulating more traditional crimes such as larceny or robbery. However, when it comes to fraud, the law is fairly clear, and the penalties are steep.

A company director making a false or misleading statement is committing a federal offense that carries the threat of serious prison time .

Fraud can take a number of forms from the top of company leadership

A company director is the figurehead of corporate leadership, and speaks directly for the company. It is against the law to misrepresent information that is relevant to the company’s status in any way that may impact investment decisions, manipulate stock prices, or otherwise influence the course of business and the market.

A common instance of fraud is when a company’s directors mislead investors as to the real state of the company’s financial health. Another form of fraud may be presented internally, such as if a CEO sends a memo to their staff informing them that they are running a quarterly profit, when they are in fact running a deficit.

Whatever the means, the law itself is pretty clear-cut. The sentence for making false statements can increase when additional counts are involved, and corporate fraud also involves other financial crime elements.

Other common forms of fraud that may be included in a bundle of charges against a company director for making false statements include:

• Wire fraud
• Money laundering
• Conspiracy to commit fraud
• Accepting or soliciting bribes
• Market abuse and insider trading
• Falsifying documents

A company director is the figurehead of corporate leadership, and speaks directly for the company.

Regardless of the charges, however, any charge is bound to come on the heels of an extensive criminal investigation. This may start with a complaint or anonymous tip. It could also arise from suspicions on the part of competing firms or directly from regulators or legal investigators.

The criminal investigation

Just as there are a number of ways for company directors to commit fraud through the issuing or simple verbalizing of false or misleading statements, so too are there a number of ways to get caught. Some of the ways a company director may be exposed for illegally making a false statement include:

• Being caught lying directly to a law enforcement or regulatory agency representative (ex: the FBI)
• Being exposed by a whistleblower within the company for circulating false information internally
• Being investigated and exposed by a regulator for false information leaked or spoken to associates for the purposes of manipulating the market
• Being caught inflating numbers in company publications or company disclosures

Of this list, getting caught lying to investigators seems like an unlikely path to downfall for a chief executive, but it happens quite often. For example, former MiMedX CEO Parker Petit was convicted of fraud in November 2020 after the Securities and Exchange Commission (SEC) found that he had falsified the company’s actual financial situation in SEC filings, with the associated securities fraud charge carrying a maximum sentence of twenty years in prison.

While not the same as lying to police in the interrogation room, falsifying an SEC filing, while it seems a brazenly reckless move to make given the consequences, is a common cause for fraud charges.

Running a legal defence to prosecutorial offense

Unlike most criminals, guilty company directors in fraud cases tend to have some of the best legal representation available on the planet. There are a number of mechanisms and legal arguments that a good defense attorney or company’s general counsel can employ when their company director is charged with making false statements.

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A primary line of defence is to attempt to argue that the company director did not know that what they were saying was false. This argument could be supported by evidence that another member of the company falsified the information. It could be chalked up to accounting error.

While a tried and not always true method of defense, a common approach is to simply deny that the company director did make a false statement. This is certainly a tougher argument to make if documented evidence suggests otherwise. Ultimately, these cases will come down to a combination of the strength of the respective legal teams involved and the truth itself.

During the Internet bubble around the turn of the century, not a day would go by that a future Fortune 500 wasn't hitting the stock market for the first time as part of an Initial Public Offering (IPO). For those unfamiliar, an IPO involves offering new stock shares in a private company on the open market to stock investors.

Why initiate the Initial Public Offering process? For one, the IPO process is a way for private companies to raise capital or reward initial investors. Generally, the stock’s initial price is determined by the potential demand for the stock and the amount of money the company wants to raise. Once the shares open up for sale on the open market, market forces take the stock in one direction or the other, usually upwards.

Besides boosting a company’s market value, going public can provide the liquidity that short-term investors require. Additionally, completing the IPO process can help a business owner improve their retention rate, as these company shares will enhance less-than-stellar benefit packages.

Due to the legalities involved with going public, the IPO process can be unnecessarily complicated. Fortunately, the private company in question can partner with legal professionals to help streamline the process.

Advantages of going public

Before initial investors willingly concede to giving up control of their company, they’ll have to understand the benefits they can derive from doing so.

The primary benefit of initiating an IPO has to do with the opportunity mentioned above to raise capital. With this extra capital, a company can fund research and development (R&D) projects, fund business acquisitions, expand company efforts, or reward initial investors.

After introducing the company to the marketplace, a company stands to benefit from the Initial Public Offering process. In most cases, undergoing the IPO process will swing open doors and allow the company to gain market share for its products or services.

Besides boosting a company’s market value, going public can provide the liquidity that short-term investors require.

Downsides of going public

Of course, there are some disadvantages a company must manoeuvre when going public.

Firstly, there’s a significant cost associated with undertaking the IPO process. These costs include accounting and legal services to prepare for the IPO proceedings and the marketing costs of raising public awareness and piquing community interest.

Secondly, the new company's reporting requirements rise significantly. Under the scrutiny of the Securities and Exchange Commission, the company has to provide quarterly and annual financial information as a form of transparency to the government and investors.

Finally, the IPO process wrestles some management control away from initial investors/owners as a Board of Directors takes over.

The roadmap for an IPO

As was stated above, the IPO process is very complicated. For an IPO to legally and successfully make it to the IPO closing, every "i" needs to be dotted, and every "t" needs to be crossed.

If you’re contemplating taking your company public, you could probably use a roadmap to get your company where it needs to go. To help in that regard, here are the most important steps you would need to follow.

Securing the services of an underwriter

An underwriter is an investment bank specialist assigned to lead the company through the IPO process from a financial perspective. These underwriters assume the responsibility of setting the initial price. Often, these IPO players participate by selling/marketing the stock and becoming actual investors.

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Setting the IPO guidelines and framework

Once the underwriter is in place, there are many legal documents and agreements that the designated parties must fill out and sign. This list of documents/agreements includes (but is not limited to):

• Underwriting Firm Commitment
• Engagement Letter and Letter of Intent
• Red Herring Document (about the company in question)
• Underwriting Agreement
• S-1 Registration Statement for SEC
• Prospectus (defines IPO)

Roadshow and price setting

This stage is when marketing personnel make presentations to top investors and brokers to drum up interest and determine potential demand. This information collected during these presentations forms the basis for setting the initial price of the offering.

The quiet period

After executing marketing-based efforts, there comes a 25 day "quiet period." During this time, underwriters are granted access to oversubscribed purchases of the stock. This window, dubbed the quiet period, is the timeframe where the "lock-up" period is set. The lock-up period, usually 90 to 180 days in length, is when insiders can’t dump their allotted shares on the market.

IPO closing

IPO closing is the day and time when the IPO goes to market, and stock transactions can begin. To reach this long-awaited day with ease, follow the steps outlined above.