"The Big Brother" leading the way, Morgan Stanley is "panicked", Wall Street is "angry"

Morgan Stanley is considering removing the big brother from the client list?

The big brother returned last month, once again hyping meme stocks like GameStop (GME) with retail investors, using the E*Trade trading platform, which happens to be owned by Morgan Stanley.

The huge trading volume of meme stocks has made Morgan Stanley start to worry. The influence of the big brother may attract unnecessary attention, especially since his behavior is already on the edge of stock manipulation.

After all, the big brother has millions of followers on major social media platforms and is actively promoting GME. Morgan Stanley is concerned that the big brother may raise the stock price for his own benefit, then sell it to unsuspecting retail investors. This could involve unknown risks for E*Trade, which is under its umbrella.

The U.S. Securities and Exchange Commission (SEC) is currently unable to handle the influence of the big brother, as this situation has never occurred before. Therefore, the SEC cannot determine whether the surge and plunge of GME's stock price constitute market manipulation.

Unable to do anything, E*Trade has to solve the problem on its own.

According to insiders, to avoid unnecessary trouble, E*Trade is conducting an investigation and considering removing the big brother from the client list.

Through compliance channels, Morgan Stanley employees found out that before the big brother's return in May to boost GME's stock price, he had already bought a large amount of GME call options on E*Trade. This means that during the week of GME's surge, the big brother may have already held a large amount of unrealized profits.

The big brother confirmed this speculation by publicly disclosing his trading screenshots on E*Trade on Sunday: 5 million shares of GME with a cost of $21.27 per share, worth as much as $115.7 million. There are also 120,000 GME call options with a strike price of $20, expiring on June 21, with a total value of approximately $65.7 million. The unrealized profit exceeds $6 million.

Currently, Morgan Stanley has not made a final decision on "removing" the big brother, but Wall Street's view of the big brother is gradually changing.

Clifford Asness, a fund manager at hedge fund AQR, angrily criticized the big brother as a "internet fraudster," believing that his return and price manipulation are simply crazy.

Another day trader, Dave Portnoy, also joked on social media: Has the big brother targeted him?