Brockton ‘Roaring Kitty’ Gamestop Investor’s Employer Fined
BOSTON — A newly minted Brockton multi-millionaire who helped fuel the rise of GameStop stock that unsettled financial markets in January has landed his employer in hot water with the state.
Secretary of the Commonwealth William Galvin announced Thursday that Springfield-based MML Investors Services, LLC will have to overhaul its social media policies and pay a $4 million fine after it failed to supervise its agents, including Brockton native Keith Gill.
Gill is better known online as 'Roaring Kitty,' an investing professional who spoke about his financial decisions on a YouTube channel and who made millions after buying GameStop stock in July last year.
Financial markets were shaken after the stock jumped in popularity in January, costing the hedge funds who had bet against the retailer billions and temporarily halting trading in the stock on several platforms.
At the time Gill was working for MML Investors Services, a subsidiary of MassMutual, according to the consent order.
He was also frequently posting videos and other materials online regarding investments and trading.
Galvin announced that under consent orders signed this week, MassMutual will undergo a three-year compliance audit and review its social media policies and trading by its broker-dealer agents.
The order notes that MassMutual inadequately supervised its broker-dealer agents, including Gill.
It failed to review social media usage or catch excessive trading in the personal accounts of agents.
While employed by MassMutual, Gill was responsible for creating educational content for use by MassMutual broker-dealer agents to present to individuals.
The inquiry opened by Galvin’s Securities Division in January showed that MassMutual failed to detect nearly 1,700 trades effected by Gill, including transactions that were nearly double MassMutual’s per-transaction limit of $250,000.
Also without notice of his employer, Gill was able to execute at least two trades in GameStop in excess of $700,000.
It is unclear if his trading and social media activities represent a conflict of interest.
However, Gill is hailed as a hero in online communities like Reddit, whose members applauded him for his analysis sparking what they view as a shift of wealth and power from hedge funds to regular investors.
“It’s clear that MassMutual was not as diligent as it should have been in supervising its employees,” Galvin said.
“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.”
In addition to the $4 million administrative fine and the compliance review, MassMutual has also agreed to train its broker-dealer agents concerning social media and personal trading.
An inquiry into Keith Gill’s registration in Massachusetts is still pending, Galvin's office stated.
In a separate consent order against the same company, Galvin has also ordered the firm to register 478 broker-dealer agents and pay a $750,000 administrative fine.