The settlement, announced Thursday by Federal Secretary William Galvin, focuses on the actions of Keith Gill, an employee of MassMutual’s subsidiary from April 2019 to January 2021. GameStop’s share price soared nearly 800% in a week, ending his term. Like a horde of small, novice investors piled up in the shock and awe of experts.
Massachusetts regulators are fining MassMutual $4 million and ordering it to overhaul its social media policies after accusing the company of failing to supervise an employee whose online cheerleading of GameStop’s stock helped launch the frenzy that shook Wall Street earlier this year.
While Gill’s job at MassMutual was to create teaching materials for current and potential clients, regulators posted over 250 hours of video on YouTube and invested through accounts unrelated to the company. He states that he has sent at least 590 tweets about GameStop.
Massachusetts regulators claimed that MassMutual was subject to specific supervisory requirements because it was unable to monitor the social media accounts of Gil and other employees registered as broker-dealer agents in the state. I quoted the message. The MassMutual unit where Gil worked has prohibited broker-dealer agents from discussing generic securities on social media.
In an online message, Gil often talked about why he was optimistic about owning a stake in GameStops, despite having struggled for years. He used the Roaring Kitty and Deep Value nicknames, with a taunt in the middle of the latter, and attracted tens of thousands of followers. He also posted regular updates to Reddit about his GameStop holdings, which swelled to tens of millions of dollars.
Gil and the red headband he wore in many of his videos became so central to the GameStop phenomenon that he testified at a parliamentary hearing about it. So he professed again, I like stocks, a statement that became a rally cry for GameStop investors on forums on the internet.
Regulators also said MassMutual did not have rational policies and procedures, among other things, to monitor the personal transactions of registered agents. For example, to monitor over-trading, the MassMutual unit where Gil worked had a rule to flag transactions over $ 250,000 on a single security made on all accounts by a registered representative. was. According to regulators, Gil sold $ 750,000 worth of GameStop options and bought $ 703,600 in GameStop shares on January 1, but his employer’s transaction monitoring system flagged both transactions. I didn’t stand.
In the settlement, MassMutual did not acknowledge or deny the findings of state regulators. It said in a statement that it was pleased to put this issue behind us, avoiding the costs and distractions associated with protracted proceedings.
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