Did a Reddit Forum Prompt a Rash of Insider Trading?

At their best, online communities can provide a place for likeminded people to make personal or professional connections. At their worst, they can lead to harassment, violence or generally awful behavior. An online community accused of prompting insider trading, though, is a new development in the realm of online scandals.

That would be the drama surrounding the subreddit r/WallStreetBets, which is currently embroiled in controversy after accusations of financial wrongdoing. Olga Lexell covered the emerging scandal for Daily Dot:

In a post that mashes up the 2003 “Ladies and Gentlemen, we got him” speech about Saddam Hussein with Barack Obama’s famous announcement about Osama Bin Laden, user bawse1 announced that subreddit creator and lead moderator jartek was banned after using the platform for personal gain by writing a book about the subreddit and promoting an organization known as the True Trading Group, which had plans to sponsor an eSports trading competition within the subreddit.

Also involved? Charges that the same reddit user, jartek, was touting stocks from which they would profit. Lexell writes that “jartek was recommended [sic] subreddit users purchase marijuana stocks without disclosing that they themselves would benefit from these purchases.”

This isn’t the first time the subreddit has drawn ire — and possibly legal action. A 2017 article at Vice painted an unsettling portrait of the community, and also noted that the SEC had been made aware of some ethically questionable activity going on there. By both accounts, it appears that using Reddit for insider trading tips won’t just get your Reddit account banned or suspended — it might lead to fines or jail time.

Correction April 12th: An earlier version of this article stated that the WallStreetBets subreddit had “gone dormant” in the wake of the accusations against jartek. While the community temporarily shifted into a subscribers-only “private” mode, it did not cease operations, and now appears to be functioning normally once again.

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