The SEC probably thought it was doing the right thing by producing videos to alert retail investors against risky investments.
In one of the short videos broadcast on its YouTube account on May 31, we are witnessing a parody of a TV game show. Two candidates are playing a sort of wheel of fortune. The show is called "Investomania."
Candidates have several options ranging from "Stocks on Margin," "Meme Stocks," "Guaranteed Returns," "Stocks Tips from your uncle," "Celebrity Endorsements," "FOMO" (Fear of Missing Out), "Tulip Bulbs," "Timing the markets," and "Crypto to the Moon."
The host announces to one of the two contestants, Brad, that it is his turn to play.
"Brad, It's your investment," the host said.
"I'll take meme stocks. Invest," Brad responded. He then pressed the buzzer.
Then appears a huge "X" on the screen signifying that it is a wrong answer. At that moment, we see a pile of money, supposed to be Brad's, disappear into a trap door on the floor, and a pie spatters across Brad’s face. The audience groans.
After an "Ouch", the host then turns to the other contestant, Julie.
"Your investment Julie?" he asked.
"I'm gonna do some research first," Julie answered, while tapping on her smartphone.
"Well played, Julie. Well played," the host said.
"We can do research?" Brad, the first candidate asked, under the laughter of the fake audience.
Then comes a voiceover: "Investing is not a game," the narrator said. "Always do your research before making an investment decision. Learn more at Investor.org. Before You Invest, Investor.org."
The satire was poorly received on social media. Indeed, many of the retail investors who invested in the so-called meme stocks, like GameStop (GME) and AMC Entertainment (AMC) , last year suffered big losses after the two companies' shares slumped amid uncertainties about their future.
Meme stocks gained in popularity with retail investors and young traders on social platform Reddit during the pandemic.
AMC shares, for example, have lost more than 54% of their value since January.
'Shouting' in 'Our Face'
The euphoria surrounding cryptocurrencies in 2021 has also died down. Bitcoin, the king of cryptocurrencies, and Ether, the second-largest digital currency by market value, fell from their November highs. The crypto market has lost over $1.7 trillion since November, according to data firm CoinGecko.
"Very disappointing to see SEC disparage investors in meme stocks as if they must have done it thoughtlessly - esp when @SECGov permits most trading to take place in dark pools," former SEC Branch Chief Lisa Braganca commented on Twitter. How about a video about dark pools @GaryGensler ? Or better yet, get trading into the open."
"Videos like this really make you wonder where the @SECGov's priorities really are....hmmmmm." another user commented.
"I don’t wonder! They are shouting it in our faces bro 😱🤢🤯 Sec is not going to protect retail investors, very sad 😢," said another user.
"Pretty sad when the @SECGov literally mocks the people that they pledge to protect. I would like to hear from @BarbaraRoper1 to see what they are doing to protect us from the PFOF abuse," posted another Twitter user.
Underneath the YouTube video, the SEC posted a message saying the satire was for educational purposes.
"The SEC’s 'Investomania' public service campaign uses a game show concept to educate investors in a playful way that investing is not a game and that they should do their due diligence when making investment decisions."
"Bottom line — don’t play games with your financial future. You can learn how you can avoid getting caught up in game-like investing, and test your knowledge in our Investomania quiz at http://Investor.gov/investomania," the agency concluded.