MassMutual paid a $4 million fine to settle a litigation with Massachusetts securities regulators.
The financial-services company got busted for not properly supervising Keith Gill.
Gill gained a cult-like following among retail investors on Reddit for posting million-dollar gains from owning shares of GameStop (GME).
On his social media accounts, he told followers why he thought buying shares of the video game retailer, GameStop, was one of the best opportunities in the stock market.
The fine is likely causing many corporate compliance departments to reconsider what they should allow their employees to do on social media, an analyst said.
An individual investor said the fine is a direct target against retail traders.
This type of lawsuit, which “turns on enforcement of the broker dealer’s own policies,” could be the first of more lawsuits after so much growth in retail trading in the past year, said a Columbia University professor who teaches a class on securities regulation. He said he wouldn’t be surprised if other employers will be very wary and likely institute more burdensome restrictions on what employees can do online trading wise and also on social sites.