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Spain: up to 6 years in prison could face those involved in cases like GameStop

The Spanish National Securities Market Commission (CNMV) has warned all citizens of its territory that it will not accept, and even sanction, behavior on the stock market similar to that recently occurred with the American company GameStop on Wall Street.

The authority considers this case as “a manual market manipulation” , which could be taken to court for its penalty. In an article published in a national newspaper, members of the CNMV described the meteoric rise in GameStop shares as “abuse” and that, according to article 302 of the Securities Market Law, it is subject to fines of up to 30 million euros. euros and a jail sentence of between 6 months to 6 years.

Today, GameStop is part of one of the most controversial and discussed issues in the financial sector of the United States and the world. The video game company appeared to be destined for bankruptcy due to the coronavirus pandemic, but rose from the ashes thanks to a coordinated group of Reddit users who decided to invest in it.

This action has had repercussions on several important financial companies, who held short positions on GameStop. That is, they were betting that the price would drop to generate profits, but it did not happen.

Due to the impact that this entire event has had on the US stock market, Spain does not seem willing to go through a situation similar. And it is that, at a legal level, this type of coordination to invest in a stock market already has a criminal record.

In 2002, a similar case occurred, which was handled by the CNMV, when a person tried to alter the price of the company Puleva Biotech through forums on the Invertia portal. It is worth clarifying that the citizen impersonated the manager of the company, giving information to third parties so that they could invest in the firm, which would incur more than one crime. The authorities tracked down the case and took it to court, where it was prosecuted for evidence of crime.

However, it is important to note that the particularity of the GameStop case is that none of Investors who are buying shares in the company have violated any regulations. Even so, members of the CNMV such as counselor Juan Manuel Santos-Suárez, consider that social networks play a key role when it comes to distortions in quotes. According to Santos-Suárez, the authority is in charge of monitoring these platforms on a regular basis to avoid market abuse.

A statement that would indicate that, if a group of people coordinates to invest in a specific market As with GameStop, this could be detected by the regulator. In this way, it seems that the message of the Spanish authorities is clear and that the stock market uprisings that threaten to occur will not go unnoticed by the State.

GameStop is an unprecedented event in the stock market world

GameStop has given much to talk about, as well as a warning that the dynamics in the financial market are changing. Financial news reports have described the GameStop situation as “an attack” on funds that hold short positions. Well-known investor Michael Blurry also described the action as “unnatural and dangerous.” Likewise, large companies have begun to put restrictions on the sale of GameStop titles in order to stop the rise of the video game company.

Likewise, the event has captured the attention of the ecosystem of cryptocurrencies for the same spirit that has spearheaded this unusual event, where a group of retail investors have managed to make the big Wall Street companies uncomfortable and impose their rules of the game on the traditional market.

The situation with GameStop, as well as other companies such as BlackBerry is a wake-up call to the authorities from minority investors. Source: josemdelaa / pixabay.com

Figures like Anthony Scaramucci, founder of the investment firm SkyBridge Capital, believe this is an indicator that decentralized financial tools (such as Bitcoin) are going to be popular in this new financial era, since small investors play an important role in them. In an age where the interconnected individual is increasingly prevalent, it seems to be a vital issue that the business and financial sectors adapt to the new market demands.

While the Spanish authorities clarify their position , GameStop’s rollercoaster of emotions and investments does not stop. Shares of the companies managed to reach a maximum of $ 500 today, but this only lasted for about two hours and then plummeted 70%. Specialists point out that the restrictions imposed by Wall Street firms, for the purchase of GameStop titles, has been a severe blow to the rise of the firm, whose shares are now above $ 200.

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Sandra Loyd
Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

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