MassMutual Hit with $4 Million Fine in GameStop Case
SPRINGFIELD — A subsidiary of MassMutual has agreed to pay a $4 million fine to resolve accusations involving Keith Gill, the former employee who gained notoriety under the name “Roaring Kitty” on YouTube for his astronomical gains during the GameStop stock rally earlier this year, the Boston Globe reported.
MassMutual also agreed to overhaul its social-media policies to better detect whether its employees are in compliance with company rules on social media as part of an agreement with the office of Secretary of State William Galvin.
In an 18-page consent order signed on Tuesday, Galvin’s office portrayed MassMutual as repeatedly failing to detect Gill’s many social-media activities, including more than 250 hours of YouTube videos in which he detailed investment strategy.
Until his termination in January, Gill, a licensed broker-dealer, was responsible for creating educational material used by MassMutual as a marketing tool to attract new customers, the consent order says.
At the same time, Gill, in his spare time, used a half-dozen social-media platforms “almost exclusively” for “discussing, analyzing and promoting GameStop,” a brick-and-mortar video game, consumer electronics, and gaming merchandise retailer, the order says.
“Gill had gained tens of thousands of followers … and his social-media posts were oft-cited as a driving force behind the market volatility surrounding GameStop in late January,” the order continues.
MassMutual prohibits its broker-dealers from discussing generic securities and company business on social media. Gill made at least 590 security-related statements on Twitter, the order says.
According to the Globe, the secretary of state’s office also said MassMutual “failed to monitor or detect nearly 1,700 trades effected by Gill in the accounts of three other individuals,” an apparent violation of company rules, the order says.
In addition, the secretary of state’s office said MassMutual failed to detect that Gill made two transactions in amounts that exceeded the company’s limit of $250,000, the order says. Those two transactions totaled almost $1.5 million.
Galvin, in his office’s press release, noted that “MassMutual was not as diligent as it should have been in supervising its employees. 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.”