Former employer of “Roaring Kitty”, the merchant of GameStop, fined
Insurer MassMutual will pay a $ 4 million fine as part of a settlement with Massachusetts regulators over the conduct of Keith Gill, a former employee and online trader known as the “Roaring Kitty” whose pom – Relentless cheerleaders for GameStop actions were at the heart of the -stock mania meme earlier this year.
State officials who oversee the markets said the MassMutual unit that employed Mr Gill, who resigned in January, failed to adequately oversee his trading and online activities, as well as that of the other agents. In addition, Mr. Gill was trading on behalf of three other individuals not affiliated with MassMutual without the approval of the insurer, according to the settlement. The insurer neither admitted nor denied the charges, but accepted the fine along with an independent compliance review and other measures.
âMassMutual is happy to put this case behind us, avoiding the expense and distractions associated with protracted litigation,â said a spokesperson.
An attorney for Mr. Gill did not immediately respond to a request for comment.
Mr Gill cultivated an online following with over 250 hours of YouTube videos, many of which detailed his take on GameStop, a struggling video game retailer that was once a mainstay of shopping malls but whose stock had languished in these days. last years. Partly because of Mr. Gill’s focus on stocks, GameStop became a favorite of the masses of day traders who loosely organized themselves on Reddit’s WallStreetBets trading forum – where Mr. Gill was also active – and briefly raised the company’s stock price as much as possible. 600% in a few days at the end of January. GameStop’s stock is currently trading at over $ 200 and remains up over 1,000 percent since the start of the year.
GameStop and other crowd-favorite online stocks, such as struggling movie channel AMC, have been turned into âmemes stocks,â companies whose stock prices have shot up sharply as online traders coordinated their move. purchasing power to guide actions. This new generation of traders often ignored traditional sources of stock advice and instead searched online on TikTok or YouTube for advice on how to gamble in the market. The explosion in memes stocks in late January marked the culmination of a surge in interest in stock trading that began amid the pandemic.
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Mr. Gill has proven to be one of the most compelling online stock market experts. His videos – he filmed himself sitting in a video game chair wearing his trademark red headband – were informal and irreverent. But even as his online profile grew, it was virtually unknown that he was a registered stockbroker and that until his resignation in January he worked as the director of financial wellness education at MassMutual, officially known as Massachusetts Mutual Life Insurance Company.
“As far as MassMutual is concerned, they were obviously totally at fault for not having supervised him,” William F. Galvin, the secretary of the Commonwealth, said in an interview. âI mean, it was beyond a little negligence case. It was thorough and thorough.
Under his online alias, Mr. Gill would provide regular updates on how his GameStop investment was doing, posting his trades on Reddit under the recurring “GME YOLO Update” heading. At one point, during the height of the GameStop frenzy, Mr. Gill posted footage on Reddit showing that his initial $ 53,000 bet on GameStop had climbed to $ 48 million, a coup that brought him down. turned into a popular hero online for legions of -being traders.
The settlement also included other details about Mr. Gill’s trading activities that regulators said violated Massachusetts rules. For example, Mr. Gill made almost 1,700 trades in the accounts of three other people. What was exchanged and the identities of the people were not disclosed. But such trading by a broker outside of the brokerage firm the broker works for must be approved in writing in advance, under Massachusetts regulations, according to the regulations.
Mr Gill had informed the company of his access to the accounts of one of these people and requested permission to manage them, which the company refused, Mr Galvin’s office said. Mr Gill also managed external investment accounts for two other people, a fact that MassMutual did not identify, according to the regulations.
An investigation of Mr. Gill by Mr. Galvin’s office is still ongoing.