FINRA GameStop Probe May Put Firms’ Compliance In Focus
Al Barbarino, 09 February 2021
The Financial Industry Regulatory Authority is likely investigating the social media activity of brokers tied to the GameStop stock-trading frenzy, which could ultimately lead to scrutiny of firms’ supervisory procedures and require fine-tuning of their compliance policies.
The erratic trading that sent GameStop’s share price soaring to a high of $483 on Jan. 28 before crashing down was fueled in part by a Reddit board where users promoted the stock to counter Wall Street firms that had bet against it. After weeks of wild fluctuations, the stock closed Tuesday at just over $50.
No wrongdoing has yet been shown. But Boston-area Reddit user and registered broker Keith Gill, who posted under the name “DeepF—ingValue,” was issued a subpoena Monday to appear before the securities unit of the Massachusetts Secretary of the Commonwealth later this month.
Because Gill carries a Massachusetts registration, the securities unit “is conducting a standard review of that registration,” a spokesperson for the regulator said.
