Dance of Darkness: The SEC and Darkpools (Refined Cut)

 

Dance of Darkness: The SEC and Dark Pools

Hello everyone, thank you in advance for your patience and for reading this thesis on dark pools and the SEC. First, please note that this is strictly not financial advice and just research I have compiled over weeks for entertainment purposes—it's all-public information and not intended to affect the price action of any stock in any way, shape, or form.

The article will be divided into 3 major parts: SEC and the financial derivatives market, dark pools of credit swaps and synthetic shares today, FUD dispersal, and legal ramifications of naked shorting. I was motivated to write this article as a result of two conditions: the ongoing process of appointing Gary Gensler as the SEC chairman, and the revelation of the existence of massive dark pool trading certain meme stocks, in an effort, to bamboozle the retail investor.

 

---THE SEC SECTION---

 

Gary Gensler, the former chairman of the CTFC (Commodities Trading Futures Commission) is currently in the process of being appointed the SEC chairman. Currently, the senate banking committee has approved Gensler at a 14-10 vote (Senate Banking Committee approves Gensler nomination, SEC Chair and CFPB Director Confirmation Hearing), and he will be voted on by the Senate proper in a weeks time on April 12th (Schwab Expects 'Activist' SEC Under Gensler; Senate Sets Confirmation Vote Date. He is expected to have bipartisan support and to be sworn in as the new SEC chairman. Gary Gensler is extraordinarily hated by Wall Street for a couple of reasons, the primary being that he is a hard-nosed regulator interested in the transparency of the marketplace and democratizing the information within it in favor of the little guy. This fundamentally goes against the closed country club nature of Wall Street, which is shown by the enforcement of the Dodd-Frank Act (Dodd-Frank Wall Street Reform and Consumer Protection Act, Dodd-Frank Wall Street Reform and Consumer Protection Act Definition). The last time Wall Street made a grievous market error was in 2008. This was due to the financial derivatives market and credit default swaps market having a massive correction (How Big Is the Derivatives Market?, Derivative Definition). The financial derivatives market (futures, in particular) was designed by markets to allow farmers, ranchers, manufacturers, industrialists, producers, etc., to lock in prices and mitigate risk in the production and operation of businesses. Thus, the core of what these markets are about is to lock in prices for commodities and to manage risk for the supply chain. Thus, the derivatives market is quite essential to the supply management side of the real economy (the part of the economy where you and I work), as such any meltdowns in the derivatives market further deteriorate our economy; in 2008, this spilled over to the real market—which combined are gigantic markets, estimated at 640 trillion dollars (How Big Is the Derivatives Market?) in market capitalization. According to Gary Gensler that represents roughly $22 of hedging for every dollar exchanged in the real economy (Financial Regulations and Consumer Protection); this is from 2010 though, so it could be a lot higher right now. Such futures and swaps are invested in almost every aspect of our lives (food, fuel, mortgages, credit rates, interest rates, etc.). So, given the importance of the derivatives market, it must stay transparent and competitive; this was not the case in 2008. 

Due to two things being in play in 2008, dark pools and credit default swaps, specifically CDSs insuring against CDOs composed of collapsing mortgage bonds. As a result of the underlying assets (mortgages) defaulting at a rapid rate, causing the collapse of the bonds, causing the CDOs composed of the bonds to collapse/default in price; causing the CDSs to kick in and insure against the original value of the bond upon inception of the CDSs. This transaction occurred, you guessed it, in dark pools. dark pools will be covered highly in-depth so bear with me, Gary Gensler’s response needs to be analyzed first. First definitions:

CDOs; collateralized debt obligations, think of these as financial products composed of multiple other financial products backed by assets like bonds, collateralized loans, etc. (Collateralized Debt Obligation (CDO) Definition), Collateralized Debt Obligation (CDO) Definition .). 

 

CDS: Credit Default Swap; in short, it's insurance against a value of a security in case its value drops. It works by taking out a policy against a security and paying somebody else to take the risk of its valuation falling. This risk is taken off your shoulders, by you paying the other party a premium to maintain the insurance policy (i.e. you hedge against your securities dropping in value). As such, the value of the security you are insuring is safe if you keep up your premium payments, insuring you against risk. Furthermore, if you choose to exercise your insurance, as the value of the security falls, you are paid out your insured amount; if the value of the security rises and you choose to close out/exercise, you will take that loss + premiums (Credit Default Swap (CDS) Definition).

Dark pools: Dark pools are exchange forums that replicate open stock exchanges, closed off to the public designed to hide institutional trading intent. In other words, by Gary Gensler himself, dark pools are designed to lack regulation, transparency and the light of transparency must be shone upon them (Dark Pool Definition).

As definitions have been established let us quickly reiterate the chain of events in 2008, and Gary Gensler's response as the CFTC chairman; and how he dealt with dark pools before (meme stock synthetic shares are in dark pools I would speculate):

Banks relax loan requirements to make cash of interest and mortgages-> package those into bonds --> package those into CDO's --> market them as a great investment, while the underlying bonds are absolute garbage (this became garbage around 2006) --> Michael Burry and co notice this and take CDS on them --> wait 2 years, 08 roles around --> the market corrects itself violently where CDS are basically used to wipe out mortgage CDO's; these transactions occur in dark pools, away from the public eye; all the while like right now the media say everything is absolutely fine, you should totally hold onto your mortgage and get it refinanced (sell your meme stocks today, the squeeze is definitely over, you should totally believe us). 

Thus, the unregulated swaps market split over into the real economy and exposed everyday Americans to real risk (with meme stocks it’s reversed, the shorter are at real risk right now). 

In comes Gary Gensler and the Dodd-Frank Act. 

 

Due to the crash, the Dodd-Frank Act was designed to curb excessive market abuses and speculation due to the lack of transparency from dark pools—it had 3 main goals according to the prospective SEC chairman (Financial Regulations and Consumer Protection, Dodd-Frank Wall Street Reform and Consumer Protection Act Definition ): 

i) Bring transparency and competition to swap dark pools

ii) Lower risk

iii) Increase market integrity

As such, according to Gensler, 90% of unregulated swaps and futures were brought from dark pools and mandated to use clearinghouses, so position data could be marked real-time for the public to view. 

 

Furthermore, the Dodd-Frank Act established several other protections (Dodd-Frank Wall Street Reform and Consumer Protection Act Definition ), these are as follows: 

 

i) Protections against the formation of too big to fail institutions (so Citadel can fail, and everybody will be fine hypothetically), as a failure of any one of them, could negatively affect the US economy.

ii) The Consumer Financial Protection Bureau (CFPB), established under Dodd-Frank also worked to curb predatory mortgage lending, deterring high commission mortgage brokers from closing high-interest loans with high fees; stopping the feedback loop of bad loans being dished out in exchange for high commissions, fees, and interest. It also protects consumers from excessive credit and debit card fees and interest, by my understanding (Dodd-Frank Wall Street Reform and Consumer Protection Act).

 

iii) Volcker Rule: It restricts banks investing in speculative trading and eliminates proprietary trading (Proprietary Trading Definition); moreover, banks are not allowed to be involved with hedge funds or private equity firms considered to be too risky; lastly, to minimize possible conflicts of interest, financial firms aren't allowed to trade proprietarily without sufficient "skin in-game". Furthermore, the Volcker Rule: "regulates financial firms' use of derivatives to prevent "too big to fail" institutions from taking large risks that might wreak havoc on the broader economy" (Citadel may be intimately familiar with this).

 

iv) Whistle-blower Program: The Dodd-Frank Act also goes ahead and strengthened and expanded the whistleblower program. As such it specifically established a mandatory bounty program (you heard that right, if you hunt down a shill spreading "insider information", that alludes to collusion or any other illegal activities, you get a big fat reward). I'll let the text from Investopedia take this one here:

 

"Specifically, it established a mandatory bounty program under which whistleblowers can receive from 10% to 30% of the proceeds from a litigation settlement, broadened the scope of a covered employee by including employees of a company's subsidiaries and affiliates, and extended the statute of limitations under which whistleblowers can bring forward a claim against their employer from 90 to 180 days after a violation is discovered".

 

Meaning, you as a whistleblower can receive up to 30% of the litigation settlement amount if you can provide concrete evidence of collusion (we'll expand on naked short fines in a bit after the in-depth dive through dark pools as promised.); so if you have proven insider information, happy hunting: Office of the Whistleblower. 

 

Lastly, to end this section I'll leave the actual Dodd-Frank Act here in case any legal scholars are reading this and would like to dissect this: Dodd-Frank Wall Street Reform and Consumer Protection Act.

 

Now going back to the man who enforced this and brought the banks and other bad financial actors under control the last time by busting these dark pools, Gary Gensler. If Gary Gensler is appointed, and if these hedge funds have their short positions in dark pools to dupe the consumer; they will not only be breaking a litany of federal financial regulation laws. Furthermore, the SEC, DTTC, and hedge funds/institutions long on meme stocks (Blackrock) have already started swimming around sensing blood in the water, once Gary Gensler comes in, based on his previous behavior of effectively curb-stomping illegal actors into submission, I can see him litigating Citadel and co (if they are guilty) out of existence and forcing them to close like he did last time as the Future's chairman. 

 

*Recap for Apes*

 

So let us recap, swaps and dark pools were used in 2008 to insure against the financial collapse created by the greed of financial institutions. The reason why we haven't had an exact repeat of 2008 is because of the Dodd-Frank Act; and the enforcer that took out Wall Street Gary Gensler is going to be running the SEC during meme stock chaos; which means the shorts lose their friends in high places that haven't been enforcing the rules. 

From here on we shall take a deep dive into how dark pools work, then talk about the hypothetical legal implications of shorter being caught with illegal naked shorts in dark pools; so, let us begin. 

 

---DARK POOL SECTION FOR APES---

Dark Pools for the layman are exchanges off of exchanges. A growing problem that brokers and retail investors noticed is that if a lot of small-scale orders are going through a relatively large and complicated fee system, for instance with the NYSE (New York Stock Exchange - Price List 2021).

Both retail and broker-dealers have issues with this due to a convoluted pricing model; if a certain threshold of clients is reached, internal off-exchange trades can begin—this is the basis for a dark pool. Morgan Stanley (Morgan Stanley Dark Pools ), Goldman Sachs (Goldman Sachs SIGMA X - The TRADE ) and of course Citadel (Citadel Securities to close Apogee 'dark pool': sources , closed in 2015 after harsher reporting requirements, go figure), all have dark pools.

This creates a buffer of exchanges, as shares circulating in dark pools can fulfill buy and sell orders to 100% outside of the exchange during normal trading activity. 

 

However, any buffer can be used as an amplifier. As such if a hedge fund wants to make a quick profit by shorting a stock, they lend as many shares as possible; dump them on an exchange and watch as the retail investor tries to “cut their losses''; while spreading FUD by calling in the media, till even the least sophisticated investor sells. As volatility spikes, smart money comes in and the shorts are covered in a dark pool. This allows you to buy shares on a downward momentum, influencing the price immediately on the open exchange. The reverse works for long positions as well, if you would like to dump it at a profit, just sell it off in a dark pool. Cramer admitted to part of the process in an interview (YouTube: Jim Cramer, 2006 discussion about tricks to manipulate the market ), on the dark pools, while not mentioned, it is certainly part of the process.

 

An illustrate how this might work in an example:

Company A wants to acquire company B ASAP by buying up let's say 30% of shares of company B. Company A, therefore, goes to market maker M to buy shares for them. M then proceeds to start buying shares on the exchange to drive the price up a bit. 

Meanwhile, they try to buy up as many shares from the dark pools as possible, to not drive the price up on the open exchange. The price on the exchange usually reflects in the dark pools, but not vice versa (because people look at the exchange prices, shortages in dark pools only show after a slight delay). 

If you were to say that a purchase of 5% of the float would drive up the price of shares from B up by 5%, that would mean that after the buy the price would be 30% higher with around 15% higher than the start price average. 

That is if people were not to start day trading the shares, which probably will happen.

However: if you were to do the same thing with dark pools you suddenly see that while the price on the exchange goes up, M is suddenly able to buy shares from places that do not influence the share price.

Again, a 5% purchase on the open market equals a 5% price increase. If 10% can be covered over the dark pools, only 20% affects share price, leaving us with an average of about 10% higher than starting price. 

 

This is 5% that was "saved" for M and A. M obviously wants a small fee for the service totaling 2%, which leaves A with around 3% saved.

That 5% came from the retail investor that was not aware of the movements in the dark pools. It costs the retail investor money. It robs you of your 30% gain in that scenario and gives you 20% instead. It costs you.

Remember Crammer stated sentiment is key in pulling the stunt off: (YouTube: Cramer's Hedge Fund Tricks)? It would be exponentially by simply getting the order flow, as such sentiment can be deduced without any bias. This allows the fund to take opposites of trades by going short negating buying pressure, either in dark pools or exchanges, as well as directing how the orders get executed. This possible order execution delay has been brought up in Congress (YouTube: Rep. Sherman asks Citadel CEO Griffin about payment for order flow at the GameStop hearing). This amounts to a hedge fund/ moneymaker being able to make a small money printer for themselves (Citadel), which we can confidently speculate exits. Furthermore, if Citadel doesn’t like your decision to buy, they can simply take the other side of the trade giving you a shorted share. 

This is where Citadel and CFD trading comes in: 

Using dark pools, Citadel as a market maker could in theory capitalize on such scenarios massively; furthermore, until 2015 they ran their own dark pool, called Apogee (Citadel Securities [CDED] - Details for MIC code) which was decommissioned in 2015 possibly due to increased reporting/transparency requirements (Citadel Securities to close Apogee 'dark pool': sources). 

By operating Apogee, however, Citadel as a market maker was able to capitalize on such scenarios massively. Since then, Citadel switched to Citadel Connect, which does not qualify as an alternative trading system requiring no reporting.

 

The best-case scenario for Citadel, if they wanted to short a stock would be to not have shares involved at all or making a contract for difference with you; this means you make an agreement with Citadel to get the current share price at any time you like from them, without ever having to buy or sell the shares. This kind of trading is heavily regulated, however, thus not common. However, they have engaged in similar tactics: naked shorting.

 

Under Reg SHO 203 b 2 iii (17 CFR § 242.203 - Borrowing and delivery requirements. | CFR | US Law | LII / Legal Information Institute) market makers are allowed to short a security under a bona fide agreement, meaning without ill intent. As such, to naked short a stock, good faith is pretended to be in effect, from there they buy naked calls from another party they control (Citadel LLC in this case). From here, the equivalent amount of shares are lent out to either "Citadel LLC" or any other party, which are then dumped on the open market. After 3 days, since the “shares” never existed on the open exchange, becoming FTD’s. As FTD status is reached, they simply go to a shell company or “Robinhood” and write ITM call options, exercise them, replacing FTD-IOUs with the ones from the shell. As these reach FTD, the reverse happens, as Citadel IOUs replace ones from their shell. Repeat to infinity and a stock price can be crashed by printing shares faster than the Feds print money (these shares will quickly add up dark pools though and need to be cleared). As institutions bailout, only retail would remain, if retail has no strategy on the security, a run by retail to get rid of the bag happens.

Now what I've said may sound despairing and should get you angry, however, I believe this cycle has almost been crushed, due to apes buying and holding. Allow me to present to you this diagram: 

As shown, they can use synthetic share production mechanisms, blatantly creating synthetic shares in a dark pool as a market maker (citadel runs it), making phantom shares using calls, Failure to Delivers, explicit naked shorting (creating IOU's), etc. (there are tons of illegal production mechanisms, most of which we're covered in my old DD's and a quick recap example above. Once they have determined which method they'll use, they target the security, and the flowchart begins. If they use the dark pools, they can theoretically create an infinite number of synthetic shares (they'd have to buy infinite real shares to buy though to cover though if they are a) caught with synthetics or b) get margin called). 

Apes for the last months have been buying up all synthetics and creating price floors as you've seen, a hedge fund at this point has 2 choices; cover all the shares (the smart choice), or digging themselves in the hole deeper hoping you will sell creating FUD (Reddit/discord infiltration will tell you when their getting desperate); so they can finally cover, as such if investors keep buying and holding, either more rocket fuel gets added to the rocket or they cover; either-or, doesn't matter what anybody else says.

 

Lastly here's a list of dark pools that I found that have existed in "the state of play", back in 2014, I apologize I couldn't find any more recent data: 

Appendix 1: Listing of Dark Pools Sites; (FYI Goldman Sachs has one, and they just got margin called for context: YouTube: Goldman at Nexus of Margin Call Mayhem  (if your r/wsb YouTube links aren't allowed for sources sorry) due to Bill Hwang)

 

*Recap for Apes*

Now let’s recap, the SEC chairman Gary Gensler is well versed in bringing swaps out of dark pools which caused the last crash and is coming in during the point of the SEC during a speculative short squeeze that will top all other short squeezes in human history (in my speculative opinion), This may cause the greatest wealth transfer in history. 

The elites from any society would not like this as it would mean, their status would be tarnished; as such they will resort to any amount of financial war crimes to try to make sure that doesn't happen. However, during the last financial war (2008), Gary Gensler came in and enforced the rules congress passed, this time he's coming in again. I believe he will enforce the rules and bring justice to these financial war crimes again as shown by his record; as such before that happens you will see FUD intensifying (which is already happening, expect more of this); as such if you've been in the game this long, you should know the drill by now. 

---LEGALITIES FOR APES---

Let’s talk legal; if Citadel as a market maker is using order flow, dark pools, and synthetic shares to balloon to the height of being too big to fail, they violate a half dozen federal laws and policies, targeting you the consumer. Let’s go over them (I'm a physicist by training, not a legal expert so I'll link the laws and tell you guys my speculation and let legal experts handle it): 

 

Firstly, let me put the sources on naked shorting and counterfeit/synthetic shares first:

Naked Shorting Definition 

Counterfeiting Stock - Explaining illegal naked shorting and stock manipulation  

Naked Short Selling: The Truth Is Much Worse Than You Have Been Told | OilPrice.com 

The Dodd-Frank Act: 

DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT 

Naked Shorting Fines: 

Goldman Sachs Fined 7.5 Bil. Won for Naked Short Selling of Stocks in S. Korea 

Strengthening Practices for Preventing and Detecting Illegal Options Trading Used to Reset Reg SHO Close-out Obligations  

optionsXpress, Inc., et al. 

Administrative Proceeding: Goldman Sachs Execution & Clearing, LP 

SHO Rule: 

17 CFR Part 242 - REGULATIONS M, SHO, ATS, AC, NMS, AND SBSR AND CUSTOMER MARGIN REQUIREMENTS FOR SECURITY FUTURES 

Division of Market Regulation: Responses to Frequently Asked Questions Concerning Regulation SHO 

17 CFR § 242.203 - Borrowing and delivery requirements. | CFR | US Law | LII / Legal Information Institute 

Key Points About Regulation SHO (sec.gov).

Anti-collusion and Market Manipulation Laws: 

Collusion Definition 

Participants at the US Securities and Exchange Commission 

COMPETITION AND THE ANTITRUST LAWS 

Market Manipulation 

Possible conflicts of interest using Order Flow payment: 

SECURITIES AND EXCHANGE COMMISSION (17 CFR Part 240)

 

Insider Trading Laws: 

SEC: THERAPEUTICSMD, INC. 2013 INSIDER TRADING POLICY 

Insider Trading - The Legal and Illegal 

 

As stated above, I am no legal expert; however, I will tell you of my understanding of them based on the sources I have read, any legal expert reading this is; feel free to correct me and post them in the comment section below (I want a specific rebuttal based on the legal text though, your co-operation is appreciated). 

If a market maker like Citadel, or any other firm that has shorted meme stocks, uses dark pools, collusion, and synthetic shares to try and dupe retail investors that simply "like the stock" and are buying and holding, by my understanding they violate:

i) Anti-collusion and market manipulation laws: By working together with other institutions they are colluding and manipulating the price, that simple.

ii) Naked shorting: Borrowing a security that doesn't exist to shorting is straight-up illegal, and if you are caught using naked shorts the fines can range from $5,128 - $14,887 (USD) per naked short (sources are given in the naked shorting section). 

iii) Synthetic share creation: This in my opinion would qualify as a naked short and market manipulation; as not only are you shorting a share that doesn't exist, you are manipulating the market so the price goes down by diluting supply, which also illegal. 

iv) SHO rule violations: From the SEC: Regulation SHO requires broker-dealers to identify a source of borrowable stock before executing a short sale in any equity security to reduce the number of situations where stock is unavailable for settlement (Key Points About Regulation SHO (sec.gov) ); as such if a broker-dealer cannot identify the source of a stock, before a short sale, it’s illegal.

v) Dodd-Frank Act violations: If Hedge funds are found colluding with each other to rig the market using short shares to become too big to fail, that violates the Dodd-Frank Act as it is explicitly designed to stop according to you guess it Gary Gensler the new incoming SEC chairman.

vi) Insider Trading Laws: Trading based on non-public information; in my opinion, this is blatantly illegal as such the debate is black and white; thus illegal.

vii) Order flow payment: The SEC and Congress are currently debating whether order flow payment is legal in the first place; we shall see what conclusion they come to.

This is all I've found so far, but if you find any more illegalities please go ahead and comment down below. 

Wrapping up these financial war crimes (their war crimes, because they are explicitly designed to hurt the innocent; retail investors). If Citadel is using synthetic shares to make itself too big to fail hypothetically it would break anti-collusion laws, the Dodd-Frank Act, prohibition against naked shorting, SHO rules, prohibition of Market manipulation, insider trading, etc. (lawyers have at it); as such, if they are caught, would be facing legal and financial extinction (of course this is just speculation by a dude on the internet, confirm it for yourself; if this is true however and can be proven in court, I believe it can be constituted as a financial war crime and should be dealt with accordingly). Furthermore, if you have insider information proving this, you by the Dodd-Frank Act's whistleblower program are entitled to up to 30% of the settlement amount, so happy hunting apes. 

 

If you are reading this on r/wallstreetbets (if this gets on there) this is as far as I can go without it violating the new rules, due to the subreddit’s size; as such, I thank you for reading my work, 

List of additional sources: 

"Biden SEC pick Gary Gensler on fintech, regulation, and blockchain," 

Biden to name Gary Gensler as U.S. SEC chair, sources say 

Background Info on Gary Gensler 

Gary Gensler cleared for Senate confirmation as SEC chairman 

Gary Gensler SEC Chairman – Forbes Advisor 

Regulatory Rule Filings - Legal & Regulatory 

Shedding Light on Dark Pools 

Dark Pool Definition 

Market Makers' Methods of Stock Manipulation 

The 'phantom shares' menace: naked short selling distorts shareholder control. - Free Online Library 

17 CFR Part 242 - REGULATIONS M, SHO, ATS, AC, NMS, AND SBSR AND CUSTOMER MARGIN REQUIREMENTS FOR SECURITY FUTURES 

Regulation SHO Definition 

Division of Market Regulation: Responses to Frequently Asked Questions Concerning Regulation SHO 

17 CFR § 242.203 - Borrowing and delivery requirements. | CFR | US Law | LII / Legal Information Institute 

Thanks for your attention, and I hope you have a wonderful day; none of this was financial advice, and purely opinion based on the sources given for entertainment purposes. Lastly, I am not a cat, and like the stock.

If you are still here, this is for subreddits other than r/wsb. We shall begin the meme stonk section for both GME and AMC; let’s dive in: 

---MEME STONK SECTION---

First, come to the sources for my absurd arguments: 

dark pool specific "glitch" data: 

Reddit: Another sighting of that POSSIBLE 4 billion share buyback, Weill see what happens tomorrow 

Reddit: After exposing the 525 million shares in the OTC dark pool today, this SoS "glitch" is really starting to make sense now. 

Reddit: Citadel and others have over 2,000,000,000 shares of AMC in the Dark pool! This is related to OTC trading. 

Reddit: Shitadel & Other Hedgies Are Trading over 525 million shares in the OTC (dark pool): GME 

 

GME Before Halts:

i) Reddit: Did we break GME? $9999 on the ASK and frozen on TD 

ii)Reddit: GME Bid/Ask Hits Limit In TDA $250/$9999 

 

Beginning with the magnitude of 1 of these dark pools that "glitched" into existence; the TD dark pools. As you can see respectively for 4.6 bill synthetic shares (floats only 450 mil for AMC) and 630 mill synthetic shares for GME (float is 45.3 mill according to yahoo finance: GameStop Corporation (GME) Valuation Measures & Financial Statistics).

As you can in the dark pool specific data, this would roughly be 10.22x float in one dark pool for AMC, and 13.91 x float for GME. Now recall, I said this list is important right; Appendix 1: Listing of Dark Pool Sites. Moving forward I'd like to propose the idea that the TD dark pool may not be the only dark pool with a similar float count (we will continue to use data with sources going forward, to speculate), keep that question at the back of your mind, we'll address it moving forward.

This section will go as follows: i) relating memestonk and CDO dark pools ii) consequences of delaying the squeeze and their financial war crimes, iii) Intent of Institutions going long iv) there being more than one dark pool.

As stated; dark pools are designed to hide institutional intent, lack transparency hide from the eye of the authorities, retail investors, and the general public. This allows them to manufacture synthetic shares in peace without having it be public knowledge that the retail investor could track, as well the insurance companies (because how dare you want market integrity and transparency right?). Once manufactured, synthetic shares are taken from the dark pools and dumped on the open exchanges through a naked short, then shorted driving the supply up and price down, diluting the stock. They use dark pools to bypass their illegal naked shorting; thus, dark pools lack transparency. 

As such, memestonk dark pools are not so dissimilar from the CDO and swap dark pools. Both are being used to hide financial instruments that will change finances forever. As such, if you hold shares of meme stocks, you hold insurance against the financial landscape changing. As such the average ape, you heard me right, holds a swap (Credit Default Swap; CDS). The shorts hold the CDO's. Similarly, I believe you can expect a massive gain if you hold these meme stocks as insurance policies; similar to 2008 (YouTube: The Big Short - "Jenga" Clip (2015) - Paramount Pictures, YouTube: The Big Short (2015) - Brownfield Fund shorts AA tranches of MBS [HD 1080p]); furthermore the media and the "sophisticated" investors are currently laughing at you right now; the same way it happened in 2008 until housing market collapsed, similarly you will have the last laugh when this squeezes. 

Now let us have a checklist, between 2008 and now: 

i) dark pools hold crucial financial securities that will determine how the market will function: check

ii) Media and "sophisticated" investors are advising retail to invest in other stocks other than meme stocks (CDS's): check

iii) Market at an all-time high: Check

iv) Gary Gensler is coming into clean the mess: Check

v) Banks and Hedge funds are scrambling to get their finances in check to prepare for the financial firestorm: Check

vi) The average person believes everything is fine: Check

vii) Nobody is selling either meme stock, and are in the process of doubling down (nobody sold their CDS's too, and doubled down on synthetic CDO's): Check (AMC Entertainment Share Price | AMC Stock Chart | Trade now , GameStop Share Price | GME Stock Chart | Trade now)

vi) Institutions are starting to view these stocks as insurance and are buying in: Check.

 

As shown, most factors for a market change are here. Now let’s expand on how the GME squeeze before the halts, and its relation to the current situation with dark pools, similarly to when prices of the mortgage bond prices were increasing when the underlying mortgages were failing; it was artificial, like the trading halts. As such here are some screenshots, during the halts: 

i) Reddit: Did we break GME? $9999 on the ASK and frozen on TD 

ii) Reddit: GME Bid/Ask Hits Limit In TDA $250/$9999 

As shown without halts GME would've jumped to 10k the next day, immediately forcing the shorts to cover. Since the halts happened, a combo of synthetic shorting and dark pools were used to tank the price, however, apes bought and held, so here we are.

Furthermore, if you check the margin requirements for meme stocks: 

i) Reddit: SHORT MR ON AMC 200% IN QUESTRADE: amcstock 

ii) We've Adjusted Margin Requirements on Certain Securities 

iii) Interactive Brokers and Robinhood raise margin requirements for trading in GameStop 

They’re up to 300% from the usual 100%, which means it's really hard to borrow, meaning inevitably they will squeeze. Combine this with the dark pools as elaborated, and the financial illegalities that have been proven in this article, you can start to comprehend the magnitude of their financial war crimes. 

Addressing the intention of institutions going long; I'll be honest, I think they're planning to wipe out their competition completely like in 2008, last time Lehman Brothers, Bear Stearns, Merrill Lynch, etc. went down; this time Citadel and other market makers, while institutions that go long on these meme stocks will simply take their wiped-out competitions market share and place. Finally, let us address the final point of this section; remember that question, what if TD is not the dark pool? well; based on these 2 sources: 

i) Appendix 1: List of Dark Pool Sites 

ii) Finra: OTC Transparency Data (NMS Tier 2, January 25th moving forward (when it started)

In my speculative opinion, the TD dark pools is guaranteed not to be the only dark pool. If all dark pools that involve AMC have a synthetic share count of 4.6 bill or higher, or even the 2 bill that Citadel holds, you could see how this could blow to Olympus Mons (Olympus Mons) really really fast, and how screwed the shorts would be; hence the FUD.

Going forward this will be a 3 part series for AMC, and 2 part series for GME; you beautiful apes have held so far despite all this and you my friends have nothing but my highest respects, I believe your efforts will be rewarded with Martian tendies sooner rather than later.

Quickly touching on the next piece FUD: the desperation of shorts, will consist of me addressing "mUh gOvErNmEnT wIlL iNtErVeNe aT 500 #trustmysourcesbro", share dilution (in my opinion will not happen, it's a ploy to get the share recounts), the squeeze not happening (total FUD cause math). As DFV said, hang in there, helps on the way.

Recap apes; firstly the crucial point is they most likely owe more than 10x float on AMC, and 13x float on GME hence they're desperate, they are resorting to financial war crimes breaking a dozen laws trying to prevent you from picking up your tendie orders, this happened in 2008 and in case anything drastic happens, memestonks are your insurance and you will more than likely have your insurance policy be exercised, all the mathematical indicators for a squeeze are there, now it's just a when, dark pools are designed to hide the truth and hide intent, and because of those synthetic shares in these pools, they are most likely panicking; lastly when this squeezes, you holds you apes hold all the cards, and you, not the institutions, you determine how this timeline and the future plays out. 

 

---HIGH LEVEL SUMMARY---

A lot has been covered, let’s summarize. This is a repeat of 2008, but this time we hold the insurance policies, in case this moons. The similarities are quite startling, from the SEC chairman Gary Gensler coming to bust this down, them using dark pools to screw the average person out of tendies, committing financial war crimes in broad daylight to shake apes. Furthermore, the dark pools explicitly showing both meme stocks have been naked shorted by at least 10x, this squeeze is mathematically confirmed, and we are looking at a fallout, how big the fallout will be depends on how big the hole they dug themselves with these dark pools; but in any case, apes hold the insurance policies so I believe we should be chilling, and if we continue to buy and hold we are simply buying more insurance for stonks we like. As such to sum it up in one sentence, their hiding in dark pools, Gary Gensler is starting the hunt and we have the insurance policies. 

---What you can look forward to in this series--

As stated above, this series will diverge into 2 hyper focused parts; one GME focused, another one AMC focused. The AMC series will be:

i) Dance of Darkness: The SEC and Dark Pools

ii) FUD: the desperation of shorts

iii) AMC the climb to 10k and battle of 12008.01

GME: 

i) Dance of Darkness: The SEC and Dark Pools.

ii) GME, the journey too Olympus Mons.

---TLDR---

They’re hiding in dark pools and using ETFs, naked shorting and synthetic shorting to manipulate the market hoping people will sell so they can exit the feedback loop as illustrated; there are most likely multiple dark pools with synthetic shares hence their desperation (+ their overleveraged). These memestocks have become swaps (CDS's: Credit Default Swaps), and those who hold them hold insurance against any financial disturbance. The longer this manipulation continues, the larger the correction will most likely be. 

---Final Commentary and Thanks---

Thank you for sticking with me and going through this rather long article, the reason why I keep this article long and extensive is because I believe in transparency and integrity. I believe all data should be put on the table, for the reader to determine what they should make of it. I don’t believe in hiding data and guiding people, I believe the average retail person is best suited in making choices that affect their future, as such the data should be transparent and visible. Moving forward, these articles will remain extensive and mathematical in nature; to bring transparency and integrity to the marketplace. Furthermore, I understand there is a lot of FUD floating around on meme stocks, these articles serve as papers that bring transparency, as they are designed to investigate memestonks. 

Lastly, I usually don't do this; however, I will put in a request as we are in extraordinary times now and I believe in the average person and my fellow ape. I would ask you to share this wherever you can (my favorite is StockTwits), Twitter, StockTwits, Facebook, Instagram, WhatsApp, etc; get the message out, I believe there are a lot of people that would benefit from the information posted; also the more feedback going here, the less of an echo chamber and the livelier this discussion becomes thus, allowing us to learn more about aspects of meme stonks that we may have missed in this article. Thank you in advance if you have shared this on your platforms of choice; I hope it helps a lot of apes; and as DFV, during congressional testimony, alluded to Hang in there. 

Here's a quick quote to encapsulate the entire article in my opinion: "You will never do anything in this world without courage. It is the greatest quality of the mind next to honor"—Aristotle. Finally, here's a quick hashtag you may use if you feel like using social media to make this article spread fast: #DanceofDarkness. 

Legal Disclaimer: None of this was or is financial advice, this is purely speculative opinion based on the sources as presented in this article—as such, it should be both viewed as and taken for entertainment purposes (i.e. the entertainment of ideas). Lastly, I am not a cat, and I like the stock. Thank you for your time.