Redditor who made millions during Gamestop chaos set up to take fall

We also can't help but wonder, if Waters is truly trying to gather all the parties involved, who else might be called to testify?

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Reading about how YouTubers and Redditors with screennames liike “RoaringKitty” and “DeepF*ckingValue” contributed to last week’s financial mania with posts and videos expounding the virtues of GME, AMC, BBY, BBBY, NOK, KOSS and the other “Wall Street Bets” stocks has been a big part of the drama in the aftermath of last week’s trading chaos.

For the last week, a parade of financial analysts, academics, regulators and bankers have warned that the capital markets sickness that sent GME shares to nearly $400 can be blamed on a handful of rogue charlatans hawking an absurd “stick it to the man” narrative on social media (and not the hedge funds trying to short GME into oblivion with naked short positions so large, they amounted to more than 100% of GME’s float before the explosion).

With Janet Yellen and the rest of the top financial markets regulators in the country meeting on Thursday, we learned last night via the New York Times, and via an interview with House Financial Services Committee Chairwoman Maxine Waters, that a key player in the Feb. 18 House committee hearing/media circus will be Keith Gill, the former MassMutual employee known alternatively on Reddit and YouTube as “DeepF*ckingValue” and “RoaringKitty”.

Read:
Reddit Trader DeepFuc*ingValue loses $19 million in 2 days as he holds on to Gamestop Stock

As we’ve reported, Gill seemingly minted millions of dollars trading GME and other stocks, at one point displaying a screenshot of a brokerage account balance with almost $50MM in it. While that number appears to have declined substantially in the ensuing selloff, more recent screenshots suggest Gill has amassed quite a substantial fortune from his trading, just like another former scapegoat we can think of.

Of course, small-time traders like Gill aren’t the only ones who profited from the chaos, and while Tenev and other witnesses will be appearing in a professional capacity, Gill is being painted as some kind of financial terrorist, and it’s already becoming clear that – just like regulators did with Nat Sarao after the May 2010 “flash crash” – they will once again find a small-time trader to scapegoat, regardless of whether their actions actually had a major impact on the market volatility in question.

But not only is Gill being dragged in front of the Committee (though Waters couldn’t say whether he was “confirmed”, only that she was trying to “get” him for the hearing), but regulators in Massachusetts are taking aim at him, and it looks like they have found an excuse to punish and scapegoat Gill, due to the fact that, technically, he was still employed by a major insurance firm, and was a registered securities broker, while carrying on his anonymous social media persona and pitching stocks online. Some might construe that as a conflict, and regulators are reportedly – according to the NYT – putting pressure on both Gill and his former employer, MassMutual, one of the biggest financial services firms in the state of Massachusetts.

Read:
Reddit Trader DeepFuc*ingValue loses $19 million in 2 days as he holds on to Gamestop Stock
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MassMutual has reportedly told regulators that it was unaware of Gill’s extracurricular social media activity. Nevertheless, according to federal regulations, the firm is responsible for monitoring the activity of its employees.

Here’s more from the NYT: 

Moonlighting under the name Roaring Kitty, Keith Gill became something of an online folk hero for his dedication to GameStop, the struggling video-game retailer at the center of a trading frenzy that sent its share price into the stratosphere.

But now a regulator in Massachusetts wants to know more about Mr. Gill, a registered securities broker, and his former day job as a financial wellness education director at an insurance company based in Boston.

Inspired in part by Mr. Gill’s cheerleading, thousands of small investors pushed stock in GameStop to as high as $483 a share and made Mr. Gill fabulously rich on paper. A picture he posted last week on the Reddit WallStreetBets forum showed his GameStop investment was worth $48 million, though his actual returns could not be independently verified.

But Mr. Gill’s former employer, MassMutual, has told securities regulators in Massachusetts that it was unaware that Mr. Gill had spent more than a year posting about GameStop on social media, online message boards and YouTube. The insurer also told regulators that had it known about Mr. Gill’s outside activities, it would have asked him to stop or possibly fired him.

William Galvin, the Massachusetts secretary of the commonwealth, has already sent letters to MassMutual asking to learn more about Gill’s employment at MM, where he reportedly served as a “financial wellness education director,” a position that required him to be a licensed broker. Though Gill reportedly put in his notice on Jan. 21, he was still technically an employee of the firm. And this apparently opens him up to liability for breaking rules set by his employer, or any regulations or laws.

Read:
Reddit Trader DeepFuc*ingValue loses $19 million in 2 days as he holds on to Gamestop Stock

In a statement to the NYT, Galvin said: “I am not trying to inhibit anyone’s ability to access the marketplace,…the issue here is transparency.”

Read more via ZeroHedge.com

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