It’s probably time for bank and buy-side compliance teams to put more effort into monitoring social media channels. If an employee recommends investments on TikTok disguised as a banana, or has become a celebrity stock guru on Reddit, they should know it.
Being a Wall Street influencer can be a lucrative business. Bloomberg cites the case of Austin Hankwitz, a 24-year-old University of Tennessee graduate who spent nearly two and a half years working on M&A deals for a healthcare company while making videos. TikTok in parallel. He now earns over $ 500,000 a year running a TikTok channel with around 500,000 subscribers. “I was able to quit my job about six months ago to work full time,” Hanwitz told Bloomberg.
Not all gigs on social media end so well. Keith Gill also had over 500,000 subscribers to his Roaring Kitty YouTube channel and was a personality on Reddit by the name of DeepF * ckingValue. But Gill hasn’t posted anything on either channel in the past five months. And now her former employer is paying a fine of $ 4 million to settle the Massachusetts Securities Division’s accusations that she failed to sufficiently supervise Gill’s trading and online activities.
Under his online alter egos, Gill has helped fuel this year’s frenzied GameStop stock buying. At one point, his initial bet of $ 53,000 had grown to a value of $ 48 million, but GameStop is now 38% below its 12-month high and Gill, 34, who has a wife and child. , resigned from his job and died. calm.
Gill is still facing a class action lawsuit bought by Christian Iovin in Washington state. Iovin claims he sold $ 200,000 in call options on GameStop when the stock was below $ 100, and was forced to buy back the shares for more money when it came close. of $ 400.
Gill’s problem – and that of MassMutual, who employed him during the RoaringKitty period – is that he was a registered employee at FINRA while making his recommendations on social media. As such, Iovin’s attorneys argued that he “took the fake character of an ordinary amateur, who was just dealing with the little guy”, and MassMutual (who neither admitted nor denied the guilt in his $ 4 million settlement) had a duty to oversee what Gill was doing. In addition to his social media activities, Gill is said to have led 1,700 transactions in the accounts of three other people – which requires prior approval under Massachusetts regulations; Gill had requested permission to manage one of these accounts and had refused.
Based on MassMutual’s experience, armies of compliance staff may want to watch YouTube in the future, and anyone considering becoming an influencer should probably give up their day job first. Having lost his financial broker’s license, Gill will not get another full-time job in finance. It doesn’t even seem to have a CFA charter anymore – the CFA Institute has quietly removed it from its directory.
Meanwhile, Ryan Sheftel, the former head of automated interest rate trading at Credit-Suisse, has secured one of the most exciting new positions in finance. Sheftel, who left Credit Suisse long before his current struggles in 2015, has spent the past five years working for high-frequency trading firm Global Trading Systems, where he led the global fixed income business. He has now resurfaced at the helm of Radkl, the new digital asset owner trading firm backed by hedge fund veteran Steve Cohen.
Radkl is apparently Cohen’s answer to Citadel Securities in the crypto space. “Tthere is a need for an institutional player like Radkl who engages in large digital asset transactions, ”says Cohen.
During this time…
Thiago Melzer, a former Morgan Stanley trader accused of “Use of a communications platform not approved by the company” and errors in marking transactions left Morgan Stanley. He denies the charges and started a hedge fund in Brazil called On Global Capital. (Bloomberg)
Credit Suisse is recruiting Steve Milovanovic of Goldman to lead FIG banking services in the Americas. (Reuters)
Barclays hired Naeem Merchant from Greenhill for the New York health care bank. (Bloomberg)
PWC says that the 14% of its employees from working-class backgrounds are paid on average 12% less than their peers. (Financial news)
Singapore has introduced a new law called the Foreign Interference (Countermeasures) Bill this would severely restrict or, in some cases, criminalize acts such as providing information on behalf of a “foreign principal” without reporting it, and receiving undisclosed funds from a “foreign principal”. (Quartz)