Up until now, the hedge funds would always win, their deep pockets prevented the little guy from pressing a short squeeze, so the price would collapse and the little guy would get the floor mopped up with him. Now, however, the big guy is at risk. The S.E.C. can do nothing without causing extreme damage to the market because this is all normal trading, they already have a rule against "naked shorting" but they rarely, if ever, enforce it because it's usually a brokerage or hedge fund or some very deep-pocketed actor who is even capable of doing it.
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