“Regulation and compliance” is the theme of the week, once again.
MassMutual was slapped with a stunning $4 million fine by the state of Massachusetts for allegedly failing to supervise the activity of Keith Gill, a former agent of the insurer’s broker-dealer and RIA business. You probably know him better as “Roaring Kitty,” or perhaps even as “DeepF***ingValue” if you spend too much time on the internet. He’s arguably the ringleader of the GameStop circus from earlier this year.
Though Gill testified to Congress that he’s not a financial advisor and was not manipulating congress, William Galvin claims he executed at least a few GameStop trades for more than $700,000 while employed by MassMutual. As far as I’m aware, it’s the first major action tied specifically to the Great Meme-Stock Craze of 2021, but it likely won’t be the last.
Meanwhile, Fidelity held a private meeting with the SEC to urge regulators to approve its Bitcoin ETF. Several firms are competing to be the first and none have succeeded yet, but how many Bitcoin bros out there get private meetings with government agencies? If I could bet on when approval is coming, I’d take the under.
But the regulatory agencies aren’t having all the fun. Charles Schwab already expects an SEC fine as high as $200 million pertaining to its robo-advisor, but now it’s also facing a class-action lawsuit from current and former clients claiming the robo breached its fiduciary duty by over-allocating them in cash in order to juice revenue from cash sweeps. The plaintiffs claim high cash allocations cost them a half-billion dollars.
Have thoughts on what all these fines and lawsuits mean for the industry? Let me know. |  | Ryan Neal
Technology Editor, Financial Planning
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| By Ryan W. Neal 2 min read | The firm also agreed to an independent compliance review and an overhaul of its social media policies. Read story → |
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| | | By Annie Massa and Miles Weiss 2 min read | The firm cited investor appetite for virtual currencies, the growth of Bitcoin holders and the existence of similar funds abroad as reasons to approve the product. Read story → |
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| | | By Ryan W. Neal 3 min read | Plaintiffs claim the firm’s high cash allocations juiced revenue for Schwab at the expense of client performance. Read story → |
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| | | By Ryan W. Neal 3 min read | The new platform aims to be a place for advisors to access a digital marketplace of insurance and structured products. Read story → |
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| Clients often know what they should do with their money to maximize their returns and work towards their goals -- but sometimes they don't do it. Learn more → |
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| | | By Joseph Lo 3 min read | The slow pace of IT innovation leaves little room for advisors to Apple-ize client-facing functions — and they’re losing business because of it. Read story → |
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