IQ Financial Advisor – Print Edition
The Massachusetts securities regulator ordered the old headquarters to Reddit‘s “Roaring Kitty” to overhaul its social media policies and pay a $ 4 million fine.
Guillaume Galvin, Secretary of the Commonwealth of Massachusetts, sanctioned MML Investor Services, a subsidiary of Mass Mutual, for his inability to supervise Keith gill and other agents. Separately, Galvin ordered MML Investors Services to pay a fine of $ 750,000 for failing to register 478 brokerage agents and ordered the company to register them.
Gill was at the heart of the GameStop trade controversy, after talking about the stock on Youtube like Roaring Kitty and on Reddit like DeepF *** ingValue.
He joined the industry in 2016 and his registration with MML Investor Services, a double-registered brokerage and advisory firm, ended on February 26.
“It is clear that MassMutual has not been as diligent as it should have been in supervising its employees,” Galvin said in a statement. “It took the media less than a day to identify the person behind Roaring Kitty’s posts, when his own employer was not paying attention to his personality online.”
MassMutual has agreed to submit to an independent compliance review of its social media policies and transactions by its brokerage agents, pursuant to an agreement between the Massachusetts watchdog and MML Investor Services. The company will also be subject to a three-year compliance audit by an independent third-party consultant.
Gill worked at MassMutual from April 2019 to January 2021, “a period during which he frequently posted videos and other material online regarding investing and trading,” according to the consent order. He was still employed by MassMutual when he got involved in the GameStop and memes stock frenzy, which ran from late 2020 to early 2021, the consent order adds.
The consent order details the inadequate supervision of brokerage agents, including Gill, by MassMutual, who failed to examine social media use or detect excessive transactions in agents’ personal accounts.
Gill was responsible for creating educational content that MassMutual’s broker agents used with clients, as per the consent order. While preparing the investor education material, Gill posted over 250 hours of videos on YouTube detailing investment strategies and posted at least 590 securities-related tweets, which “went unnoticed by his employer. According to Gavin’s office.
MassMutual also failed to detect or monitor the nearly 1,700 transactions Gill made in the accounts of three other people, or certain transactions he initiated that were nearly double MassMutual’s limit of $ 250,000 per transaction. , according to the consent order. In some cases, trades were almost double those limits, the order says.
Gill has made at least two transactions involving GameStop for more than $ 700,000, for example, the consent order adds.
In addition to paying the fine, MassMutual agreed to train its brokerage agents in social media and personal trading.
Galvin’s office notes that an investigation into Gill’s Massachusetts recording is still ongoing.
Meanwhile, Gill also faces a proposed class action lawsuit, which accuses him of posing as an amateur investor and artificially inflating the GameStop share price for his own profit.
Editor’s Note: This article was originally published as a news article on September 16, 2021.
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