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GameStop shares were at the heart of a trading frenzy fuelled by a Reddit page.DADO RUVIC/Reuters

Moonlighting under the name Roaring Kitty, Keith Gill became something of an online folk hero for his dedication to GameStop GME-N, the struggling video-game retailer at the centre 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 US$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 US$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.

MassMutual MCI-N, officially known as Massachusetts Mutual Life Insurance Co., also informed regulators that Mr. Gill gave his notice Jan. 21 but was technically still an employee of the firm and its securities and investment advisory arm, MML Investors Services, through Jan. 28 – the week when GameStop shares surged the most.

In particular, the Massachusetts regulator is investigating whether Mr. Gill or MassMutual broke any rules.

Licensed professionals have an “obligation” to inform their employers about their outside activities, said William Galvin, the Massachusetts Secretary of the Commonwealth.

On Friday, Mr. Galvin’s office sent a letter to MassMutual’s general counsel seeking information about Mr. Gill’s employment status and whether the company was aware of his outside activities promoting GameStop.

The letter also sought details about the firm’s “process for identifying undisclosed business activities” and for monitoring an employee’s use of social media.

Debra O’Malley, a spokeswoman for Mr. Galvin’s office, said much of MassMutual’s response was confidential because the inquiry is open. But she confirmed the date of Mr. Gill’s departure and reiterated the company’s contention that it was unaware of his activities.

Ms. O’Malley said MassMutual had told securities regulators that it previously denied a request by Mr. Gill to perform side work managing an investment portfolio for a family friend after he joined the company in April, 2019.

Paula Tremblay, a MassMutual spokeswoman, said in an e-mailed statement that Mr. Gill was no longer employed by the company and that the matter was under review. She declined to comment further.

Mr. Gill, 34, did not respond to messages seeking comment. He has been mostly silent other than speaking to The Wall Street Journal. In its article, published Friday, the WSJ described Mr. Gill as having recently worked in marketing for MassMutual.

Mr. Gill had not posted on his YouTube channel since Jan. 22, but he still posts on the Reddit WallStreetBets forum. On Wednesday, his account posted an image that put the value of his GameStop holdings at more than US$8.6-million. The image also showed cash holdings of nearly US$14-million.

GameStop’s stock has lost more than two-thirds of its value since closing at US$347 on Jan. 27. The stock was up nearly 3 per cent Wednesday and closed above US$92.

The GameStop saga has federal regulators and lawmakers promising further scrutiny.

Members of Congress have already suggested they would examine practices of trading platforms like Robinhood that curbed retail trading at the height of the frenzy. And the House financial services committee scheduled a hearing for Feb. 18 to discuss the volatility in shares of GameStop as well as the effect on the market of short-selling, the bearish stock bets that some retail investors revelled in trying to punish. On Wednesday, Representative Maxine Waters, who is chairwoman of the committee, said on financial network Cheddar that she wanted Mr. Gill to appear at the hearing.

Treasury Secretary Janet Yellen has also asked federal financial regulators, including the Securities and Exchange Commission and the Federal Reserve, to attend a meeting about the GameStop flurry, the department said Wednesday.

The financial services industry in recent years has adopted a number of regulations and policies about the use of social media by financial professionals.

The Financial Industry Regulatory Authority – the securities industry’s main self-regulatory organization – says financial services professionals must avoid making “false, misleading claims, exaggerated statements and material omissions” on social media. FINRA’s guidelines require brokers and other financial services firms “to supervise the business-related content” that employees post.

Mr. Gill’s Roaring Kitty videos did include a disclaimer saying investors should consult with a financial adviser before making any investment decision and “should not treat any opinion expressed on this YouTube channel as a specific inducement to make a particular investment.”

Andrew Calamari, a lawyer with Finn Dixon & Herling and a former director of the Securities and Exchange Commission’s New York office, said it was too soon to determine whether Mr. Gill had violated any securities regulations. But Mr. Gill could have violated company rules if he did not receive permission for his posts on Reddit and YouTube.

“Firms don’t allow employees to go out and make predictions on stock,” he said of employees who aren’t analysts. Many financial firms also require employees to disclose if they have brokerage accounts with other firms to monitor their trading activities, he added.

Mr. Gill, as a securities broker, is registered with FINRA. His broker registration does not indicate he has any outside business activities. FINRA rules prohibit brokers from filing incomplete or misleading information about themselves.

It’s unclear if MassMutual has any regulatory issues itself. Firms can be liable for failing to supervise employees, but if Mr. Gill circumvented the firm’s processes for monitoring employees’ use of social media, then it may not be at fault.

For many of the small investors who piled into GameStop and other stocks in hopes of hurting short-selling hedge funds, Mr. Gill’s moonlighting activities may not be a concern.

But Mr. Galvin said his office was examining the matter to ensure the integrity of the markets and securities professionals giving stock advice. Retail investors need to know everything about the people they invest with or get advice from, he said.

“I am not trying to inhibit anyone’s ability to access the marketplace,” Mr. Galvin said. “The issue here is transparency.”

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