More than 65,000 small investors in a now infamous stock called Meta Materials (MMTLP) have been caught in the crossfire of rapacious hedge funds and unresponsive regulators. The stock came under fierce attack from short sellers, and regulators abruptly and permanently halted all trading over a year ago, just before a merger was closing.

This hurt investors, including a few thousand military veterans with upwards of a quarter of a billion dollars at risk. It also protected hedge funds from a "short squeeze" that might have crushed them. To hear these investors tell it, the Financial Industry Regulation Authority and the Securities and Exchange Commission have been stonewalling them ever since.

You have heard stories like this before. The surprise here is that the investors are waging a sophisticated, passionate crusade to right this wrong. They are shining a light on naked short selling, an illegal practice that involves selling vastly more counterfeit shares to investors than the total real shares outstanding and available.

They also have unearthed possible conflicts of interest or worse at FINRA and the SEC, with cameos by Fidelity, Vanguard, Blackrock, TD Ameritrade and more.

On X, the #MMTLP followers publish long tweets and timelines, and link to their own websites on the case. Others produce mini-documentaries, such as "Collusion", and "Together We Can Change the World," and, at 85 seconds, "In Limbo."

They include a Navy veteran who put $68,000 into this and had a heart attack on the day the FINRA took the action that all but killed his investment; and a fishing boat captain; and the 41-year-old wife of an Air Force lieutenant colonel, with four children, who told me she fell into deep depression as this ordeal strained her marriage.

Another young woman messaged me, saying she talked six members of her family into pooling their savings to invest in this deal, and now their money may be lost entirely, and they are furious at her. She has had suicidal thoughts at some points, she says.

The regulators in this case are with FINRA and the SEC. FINRA, the Financial Industry Regulatory Authority, is Wall Street's own privately held oversight agency. It, in turn, is overseen by the Securities and Exchange Commission, whose chairman is Gary Gensler.

"The main charge of FINRA and the SEC is to protect retail investors. There's a lot of people out there who have lost complete trust in the system," says John Tabacco, a Wall Street trading veteran and host of the Newsmax show "Wise Guys," which airs on Saturday nights.

He talked about this #MMTLP case last week on my podcast, "What's Bugging Me" on Ricochet. "Gary Gensler, if he's not letting his friends like SBF (convicted FTX scammer Sam Bankman-Fried) walk free on all kinds off c**p, he's more focused on carbon credits and climate rebates, and Diversity, Equity, and Inclusion," Tabacco says.

"And they were caught asleep at the switch on this one, and a lot of retail investors got hurt badly."

Some media have played this story as a meme stock and a pump & dump scheme, with wild bets by naive investors who got spanked. In truth, many did their homework and built a good investment case, and some took a calculated gamble. Just as hedge funds do.

They relied on assurances from regulators who then reversed course and shut down trading in MMTLP three days earlier than planned, without explaining why.

These people have earned a full audit of how many real shares were sold short vs. how many counterfeit, naked shares were sold; and full disclosure of all communications at FINRA and the SEC regarding the case. And a explanation of who started trading in MMTLP stock, which never was supposed to trade publicly in the first place.

They have enlisted Rep. Mike Crapo of Idaho, who was seen grilling the SEC's Gary Gensler on MMTLP in a recent hearing. Rep. Ralph Norman of South Carolina says Gensler sidestepped their questions. He and Rep. Pete Sessions of Texas sent an open letter to FINRA and the SEC, posing 16 questions and demanding a full accounting; more than 70 congressmen from both parties signed it.  But, so far, no answers.         

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Dennis Kneale is an award-winning journalist, media strategist, crisis advisor, writer, and host of the podcast "What's Bugging Me" on @Ricochet.

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