MassMutual ensnared in GameStop drama
Massachusetts Mutual Life Insurance Company has been named as a defendant in a lawsuit against a former employee and social media personality who was a key player in last month’s Wall Street feeding frenzy that saw GameStop shares soar.
The lawsuit alleges that Keith Gill – known as “Roaring Kitty” on YouTube and “DeepF***ingValue” on Reddit – violated securities laws and caused “huge losses” for investors. Gill, who worked for MassMutual until last month, allegedly hid his sophisticated financial training and tricked retail traders into buying inflated stocks, according to a Reuters report.
Gill was scheduled to testify to Congress Thursday about the “Reddit rally,” which many lauded as a victory for everyday citizens against Wall Street hedge funds that were betting against GameStop and other struggling companies. The lawsuit accuses Gill of inciting the rally.
Gill denied that he violated any laws, pointing out in prepared congressional testimony that he used publicly available information to determine that GameStop was undervalued, Reuters reported. He shared that view with a “tiny” social media following prior to the January rally, he said.
“The idea that I used social media to promote GameStop stock to unwitting investors is preposterous,” Gill said in his testimony. “I was abundantly clear that my channel was for educational purposes only, and that my aggressive style of investing was unlikely to be suitable for most folks checking out the channel.”
The lawsuit, filed by Christian Iovin, a Washington state resident who bought GameStop stock options, also named MassMutual and its subsidiary MML Investors Services as defendants. MML Investors Services employed Gill until January 28, Reuters reported.
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The lawsuit contends that MassMutual was obligated to supervise Gill’s activities as a registered broker. MassMutual told Massachusetts regulators that it was unaware of Gill’s outside activities, Reuters reported.
The lawsuit alleged that Gill purchased GameStop stock for $5 and then used social media to push shares from about $20 in early January to more than $400 in only two weeks, violating securities laws against manipulating the market.