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US insurer cops $4 million fine over employee’s role in GameStop saga

September 22, 2021

US insurer cops $4 million fine over employee’s role in GameStop saga

The fallout from January’s now-infamous GameStop short-squeeze continues to hurt major financial institutions, with US insurance firm MassMutual the latest victim.

The fallout from January’s now-infamous GameStop short-squeeze continues to hurt major financial institutions, with US insurance firm MassMutual the latest victim.

Massachusetts-based life insurer MassMutual copped a US$4 million fine this month after state regulators found the company failed to “adequately supervise” its employees’ trading and online activity.

Specifically, the fine relates to the conduct of former MassMutual employee Keith Gill – who also trades online under several aliases, including ‘Roaring Kitty’.

Mr Gill was a central figure in GameStop’s surprise rally and provided “relentless cheerleading” for the company’s shares, as well as providing stock advice on the company across social media platforms while working for MassMutual.

He was also found to have been carrying out trades for three other people not affiliated with the insurer at the time.

MassMutual did not admit or deny the regulators’ accusations, but did agree to the fine, saying it was “pleased to put this matter behind us, avoiding the expense and distraction associated with protracted litigation”.

Secretary for the Commonwealth of Massachusetts William F. Galvin, however, said MassMutual “were obviously totally at fault for not supervising [Mr Gill]”.

“I mean, it was beyond a small matter of negligence. It was complete and thorough,” he said.

Mr Gill had posted more than 250 hours of video to YouTube discussing markets, with much of it relating to GameStop, and was a member of WallStreetBets, an online message board hosted by Reddit, which was used by day traders to organise their short squeeze on the beleaguered video game company.

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