Canadian regulators have said they will act if they see 91裸聊视频渁busive91裸聊视频� or 91裸聊视频渕anipulative91裸聊视频� trading, as Reddit and other social media sites stoke stock mania.

But experts say that legal action is not straightforward: it depends on whether rallies in stocks like BlackBerry and GameStop are co-ordinated and harmful or simply cases of contagious excitement.

It91裸聊视频檚 a debate that91裸聊视频檚 playing out on the forums themselves.

On Reddit91裸聊视频檚 Bay Street Bets, one user wrote of BlackBerry91裸聊视频檚 stock, 91裸聊视频淲e will support it and make it climb together,91裸聊视频� while another decried the idea that individual investors are some sort of Reddit army.

Lawyer Chris Sunstrum says that based on what91裸聊视频檚 been reported so far, the stock mania on Reddit forums is still in a grey area for regulators.

91裸聊视频淒oes this constitute market manipulation? 91裸聊视频� I think what the regulators are trying to figure out is, have they crossed that line,91裸聊视频� says Sunstrum of Goodmans LLP.

91裸聊视频淵our typical retail investor just going on a chat board and giving their opinion, or helping rally the troops behind buying GameStop, is probably not going to be offside.91裸聊视频�

The warning about manipulative trading from the Canadian Securities Administrators and the Investment Industry Regulatory Organization of Canada on Monday came after BlackBerry shares whipsawed over the previous week, mirroring trends seen in the U.S. with GameStop, AMC and other securities.

Canadian silver mining companies have also seen a boost recently, although chief executives and Reddit users alike said social media is not the only factor behind the precious metal91裸聊视频檚 rise.

So far, the social media dynamic around so-called meme stocks doesn91裸聊视频檛 fit 91裸聊视频渘eatly91裸聊视频� into any of Canadian securities laws, says Sunstrum 91裸聊视频� although it is still early days on the enforcement front.

Sunstrum says that out of all the potential accusations that could be brought against Redditors, market manipulation could become the biggest focus.

Canadian law prohibits doing something to artificially affect the price of a publicly traded security in a co-ordinated way, he says, though it can be a high bar to prove.

Another legal ramification for Reddit activity could be the charge of advising people about trading securities without the proper registration, though Sunstrum says it91裸聊视频檚 not clear that91裸聊视频檚 been the case over the past week.

Sunstrum says that other offences that could come into play include misrepresentation, where a person or company makes a statement that they know or should know is misleading or untrue in any material respect.

To fall into this category, the statement would be expected to have a significant impact on the market price of the shares, Sunstrum says, although he noted that defamation and libel could also come up as separate legal issues.

Ernest Wong, director of research at Baskin Wealth Management, says the Canadian market already has some limits in place that make it unlikely the situation in the U.S. will play out exactly in Canada. Canadian regulators and finance websites don91裸聊视频檛 list short-selling activity in the same way as the U.S., and the options market here is much smaller, Wong says.

Queen91裸聊视频檚 University associate professor Mohamed Khimji says further regulation also risks doing more harm than good.

91裸聊视频淚s market manipulation the right expression? I don91裸聊视频檛 really have a problem with using that expression 91裸聊视频� I think the question is, really, is the activity harmful? Does it have negative effects on market confidence, the credibility of the stock markets in general?91裸聊视频� asks Khimji, who researches business law.

91裸聊视频淎ny kind of buying and selling activity is going to manipulate the price at some level. That91裸聊视频檚 just how trading works.91裸聊视频�

Khimji says that Canadian securities regulators tend to take the lead from U.S. regulators, and that action south of the border will give Canadian regulators something to go off. But, says Khimji, the market may adjust on its own.

91裸聊视频淭hey91裸聊视频檙e really just two groups that have two different trading strategies 91裸聊视频� Both sides will learn lessons by the end of it,91裸聊视频� says Khimji, referencing short-sellers as one group and retail investors as another. 91裸聊视频淚 think this will just be priced in. Any short-seller of the future will think about this as a risk right here: what happened with GameStop, retail investors buying it up when it91裸聊视频檚 really cheap and driving up the price.91裸聊视频�

Increasing regulation on retail investors could actually have the detrimental effect of limiting participation in the market, says Khimji.

91裸聊视频淔rom a democratic perspective, I think it91裸聊视频檚 just helpful for as much (of) society to participate in the markets as possible. In any kind of regulation we need to be really sure that it91裸聊视频檚 going to help and not inhibit access,91裸聊视频� he says, adding the stock market 91裸聊视频渟houldn91裸聊视频檛 just be for wealthy people.91裸聊视频�

Anita Balakrishnan, The Canadian Press

Like us on and follow us on .

Want to support local journalism during the pandemic? Make a donation