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Former employer of Memestock King receives $ 4 million fine

GameStop Store in Alhambra, California, January 2021.

GameStop Store in Alhambra, California, January 2021.
Photo: Frederick J. Brown / AFP (Getty Images)

Former employer of RoaringKitty, an online trader who helped instigate a short squeeze on Reddit on hedge funds betting against Gamestop promotion, agreed to pay a $ 4 million fine.

Keith Gill, known as RoaringKitty on YouTube and DeepFuckingValue on Reddit, was a registered securities broker who served as Director of Financial Wellness Education at Massachusetts Mutual Life Insurance Company (MassMutual) when he started promoting a sick GameStop video game seller as a faithful assistant ricochet in mid-2019. In the end, he became one of the central figures in coordinated mileage against hedge funds what was short on GameStop (le.g. Citron Capital and Melvin Capital) which was hosted on the Reddit board r / WallStreetBets in January 2021.

Subreddit / rWallStreetBets caused Gamestop’s stock to skyrocket, causing huge losses for some vampiric hedge funds Who tore up the company shook the markets enough Congress held (useless) hearing, and did Gill hefty chunk wealth. Short squeeze also started the wave of speculation on other “meme stocks” such as AMC has caused serious problems for the Robinhood stock trading app, which aloof a large number of its users stop trading in some of the affected shares.

V New York Times reported on Thursday, when MassMutual reached an agreement to pay a $ 4 million fine to resolve claims by Massachusetts securities regulators that the company did not do enough to oversee Gill. and his colleagues on Internet transactions and activities. In addition, government regulators argued that Gill conducted transactions for three people unrelated to MassMutual without obtaining the company’s permission. The Times wrote that the agreement reached between MassMutual and the state does not include admissions of wrongdoing, but includes other additional measures such as compliance review and auditing.

MassMutual has previously stated that if he knew about Gill’s online activities, he would have asked him to stop or even simply fired. He was technically busy in the company until January 28, when the GameStop fiasco is not over yet; since Gill was a licensed professional, he was required to notify his employer about outside activities. MassMutual was also required to track any hidden activities of its employees, and financial firms usually should not allow their analysts to promote various stocks when they are not on the chart.

An investigation was initially launched by the office of the Secretary of the Commonwealth of Massachusetts, William F. Galvin. According to Wall street journalGalvin says government regulators concluded that MassMutual did not have “reasonable policies and procedures to track and trace” any part-time employees.

The Times wrote that other parts of the settlement detail how Gill conducted 1,700 transactions with three other people in a manner that was contrary to government regulations. Although MassMutual denied Gill permission to manage one of these people’s accounts, it didn’t stick. to the other two. Galvin’s office determined that the insurer had third-party software that was supposed to alert him of transactions worth more than $ 250,000 in a single security. The magazine reported, but this feature has been disabled. Additionally, regulators were unhappy that MassMutual never found out about Gill’s massive online change. According to Boston Globewhich included over 250 hours of YouTube videos of stock tips, 590 securities-related tweets, and his Reddit account.

A spokesperson for MassMutual told the Times that the company “is happy to put this issue in the past, avoiding the costs and distractions of protracted litigation.”

“As for MassMutual, they obviously completely to blame for not being watched, ”Galvin told the newspaper. “I mean, it was beyond a little negligence. It was complete and thorough. “

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