Search

MassMutual fined $4m over meme-stock trading by ‘Roaring Kitty’ - Financial Times

nomporkin.blogspot.com

The US insurer MassMutual has been fined $4m by the securities regulator in its home state of Massachusetts for failing to properly supervise Keith Gill, a former employee whose videos under aliases including “Roaring Kitty” encouraged millions of new day traders to pump shares of GameStop higher.

Gill, his forehead often adorned with a red bandanna, became a central figure in the meme-stock craze that captivated the country and which landed him in front of a Congressional committee hearing last February.

The Massachusetts securities regulator said that when Gill was employed at a brokerage subsidiary of MassMutual, the company failed to oversee his or other agents’ social media use or review “excessive trading” in their personal accounts.

Gill, who also took the alias DeepFuckingValue, had a job at MassMutual creating educational material for clients. The regulator noted that he recorded and shared more than 250 hours of videos of his trading strategies on YouTube while working at MassMutual between April 2019 and last January.

“It’s clear that MassMutual was not as diligent as it should have been in supervising its employees,” said William Galvin, Massachusetts secretary of the commonwealth. “It took the media less than a day to identify the person behind the Roaring Kitty posts, while his own employer took no notice of his online persona.”

MassMutual agreed to undergo an independent review of its social media guidelines and will be audited for three years, Galvin said.

“MassMutual is pleased to put this matter behind us, avoiding the expense and distraction associated with protracted litigation,” the company said.

Gill became a central character in the meme-stock craze, posting his trading activity in the troubled video game retailer GameStop to the Reddit social media platform.

His trading was closely followed and even mimicked by others who watched in awe as shares of the company shot up from roughly $19 at the year’s start to $483 just weeks later.

The volatile activity wreaked havoc on hedge funds and strained the finances of Robinhood, the online trading platform favoured by many retail day traders, prompting it to hastily raise billions of dollars of capital.

Galvin’s office also found Gill executed nearly 1,700 trades for three other unnamed individuals, including some that were worth nearly double the $250,000 limit that MassMutual set for its employees. The regulator said the company had failed to detect the trades.

MassMutual, which did not admit or deny the findings, was also ordered to pay an additional $750,000 fine for failing to register other agents, and to seek registration of 478 of them.

Adblock test (Why?)

Article From & Read More ( MassMutual fined $4m over meme-stock trading by ‘Roaring Kitty’ - Financial Times )
https://ift.tt/3Cjw6xj
Business

Bagikan Berita Ini

0 Response to "MassMutual fined $4m over meme-stock trading by ‘Roaring Kitty’ - Financial Times"

Post a Comment

Powered by Blogger.