Foreign. Let's talk about some hot drama: SEC Probe's Ryan Cohen's Bed Bath and Beyond trades billionaire took 120 million dollar position in housewares retailer than abruptly sold it when this was happening in real time I covered it. Emotions were high and the insanity of the situation was high. As a quick recap, here's what happened every single quarter.

Depending on who you are, your position, the size of your investment, some people need to report their position which includes long positions, calls and puts not shorts. Anyway, this report came out for Ryan Cohen because he was at the point of being an activist investor large investor in Bbby the ticker symbol for Bed, Bath and Beyond. So when the report came out of his position at whatever day for the previous quarter, people realized that he increased his position. Correct me if I'm wrong here, but I believe it was both his Equity position and also his call option position.

Well, obviously when this became public, the retail Community especially fueled by Reddit saw this as an amazing opportunity and within a day or two, the stock shot up crazy amounts. Then within that that very short movement that was prompted because people saw what he was doing. he sold his entire position into it. He went to zero and I believe his profits were in the realm of 60 million dollars.

I Remember the day this happened, you could check it out. I was streaming literally from a stair stepper talking about how when your suit, you're always a suit. He was doing this to make money and that's his goal. His goal is to make money so whatever, the timing of it maybe a little bit immoral I Question if it is or isn't illegal just because I'm not a lawyer I don't work for the SEC but obviously the SEC finds the whole situation to be suspect enough that they are now officially probing.

Mr Ryan Cohen The SEC is investigating billionaire Ryan Cohen's ownership and surprise sale of Bed Bath and Beyond shares at a time when so-called meme socks were all the rage with investors Cohen took a 120 million dollars taken Bed Bath and Beyond and push for changes to the housewares retailer sales strategy, but abruptly sold his 11.8 interest in August 22. So once again, when you're over 10, when you're that large of an owner of a company, you're going to be subject to like having to do these quarterly filings just days after tweeting positively about the company. The five-month investment netted him a profit of nearly 60 million dollars. Also right here, the fact that it was five months.

There's other rules about this of like the duration of your hold, especially once again, for his size of an investment. A lot of people calling that out I was like well, hang on man, you had to be in for more than six months, so shouldn't you have to give the money back? But maybe we're gonna get more information on that when the SEC does look into the situation. Cohen's interest in the company spurred a frenzy of trading that caused its stock to soar 34 in a day before collapsing when he disclosed the sales prior to which he had gotten three new members to point into the board they asked to see has requested information from Cohen about his trades and his Communications with officers or directors at Bed, Bath and Beyond. So obviously in the market if it was some random person who didn't really have public influence who didn't have a connection to the board who didn't recently take on an activist campaign to get really his own people on the board, you could buy and sell at your own free will, even if it's sizable.

The question here is what was going on with you putting on board members? What was the communication? Basically, it's saying, did you know something that was not public information and trade on it? That's what I would assume the SEC is really looking into here. The SEC civil investigation sometimes takes more than two years and can end without regulator bringing formal claims or wrongdoing. Once again, this isn't a criminal case, it's a civil case and the burden of proof is a lot lower in a civil case and he's not going to be facing any jail time even if found guilty. Basically, you just get hit with a financial penalty and also with that you don't have to be proven guilty.

It kind of is in the best way. I can describe it of okay or is it more so that you're guilty or more so likely that you're innocent and depending on where you are on that you might have to pay some level of a fine. But no matter how bad this goes for him or even the SEC, he's not going to face jail time. This is just a civil investigation which means money.

A group of Bed Bath and Beyond investors sued Cohen last year in Washington D.C federal court alleging he committed fraud because he was aware of bad news about the company that hadn't been disclosed when he sold his share. So once again, it doesn't really have to do with his buying and selling. it has to do with the timing of his buying and selling. and did he know something that was not yet publicly available which prompted him to do his sale.

The claim: his statements on Twitter and in the SEC filings were part of a pump and dump strategy that left small investors nursing big losses and an order issued in Late July declining to dismiss the investors claims. U.S District Judge Trevor McFadden Called the timing of Cohen's trades sketchy and one thing that is like kind of being referred to is actually this tweet right here. Here's the link for it: Luke Capital says Bed Bath and Beyond comeback doesn't make fundamental sense. Stock headed to one dollar and then he said right here at least her cart is full with this smiley emoji and that's actually be attempting to be used as a piece of proof according to the investors lawsuit, Cohen Misled investors when he tweeted on April 12, 2022 in response to a negative news article about Bed Bath and Beyond that included an emoji showing the face of the Moon.

In his response to the investors lawsuit, Cohen denied misleading the market about his trading plans. He decided to sell. He said in a court filing because the stock price had unexpectedly increased to a value that exceeded what he believed it was worth. So he's just saying it was fundamentally overvalued, so it was time for him to leave.

Cohen Also said that one of his earlier disclosures told investors that he could sell some or all the shares. He didn't change that statement, so investors were on notice that Cohen could dump his stake at any time. In declining to dismiss the case, judge McFadden wrote that investors plausibly alleged that the Moon tweet relayed that Cohen was telling his hundreds of thousands of followers that Bed Bass Talk was going up and that they should buy or hold I find that to be silly, just an emoji like come on. I I Think that's a bit of a stretch.

The week after his tweet, Cohen filed two public updates to his Bed Bath and Beyond Holdings the First on August 16th, 22 that he said he hadn't done any trading during the prior 60 days. The second filed on August 18th obviously two days later said that he began selling all the shares two days earlier. So basically the timing of it is suspect and maybe it's in the legal gray area if anything. I think if this crosses a clear moral line, basically a document came out saying hey, increase his position the document is delayed though the position was actually increased before the world found out of it on August 16th when they found out the stock ripped up, he sold that day and then the world found out he sold that day two days later and then the stock cratered.

Is it illegal once again I'm not a lawyer I don't speak legalese I Think it's pretty freaking immoral. but if the argument is like oh, the Emoji told us he was buying and we should all hold why I Don't agree with that I think if there is going to be legal culpability here I think it's going to be more so of the long the lines of did he know something that prompted him to sell that was not public information hence why the SEC is looking into his Communications with members of Bed Bath and Beyond I think if I had to guess I think that's what is really going to end up focusing on. But once again, I'm no lawyer. but I think the whole Emoji thing is a weak argument.

Uh, once again, I do think that it's immoral. A lot of people look to him and they like literally call them like Daddy Cohen and blah blah. My wife or girlfriend's boyfriend like he was looked at as like this symbol of a guy who was going to end up Diamond handing him. so obviously his sale of it like hurt that symbolism.

but that is the question of was it legal or illegal and obviously it's gonna apparently take a while for the SEC to actually give us any answer on that. Apparently it could take a couple years, but wild stuff truly truly. Wild.