Class-Action Lawsuit Against Keith Gill Alleges Securities Fraud Over GameStop Stock Manipulation

A class-action lawsuit accuses stock trader Keith Gill, known as Roaring Kitty, of securities fraud for allegedly manipulating GameStop's stock price through social media posts. Gill, famous for his role in the 2021 GameStop short squeeze, is accused of using Reddit posts and public disclosure of holdings to inflate the stock's value, profiting from call options and shares. This led to an 8% drop in ROAR, a memecoin linked to Roaring Kitty, and some speculate he may have influenced the CHEWY memecoin's price. Gill maintains his innocence and denies any wrongdoing.

In the rapidly evolving world of stock trading, the role of social media influencers has gained significant attention. One such figure, Keith Gill, known as "Roaring Kitty" online, has found himself at the center of a high-stakes legal battle. Accused of manipulating GameStop's stock price through social media posts, Gill faces a class-action lawsuit that could have far-reaching implications for the financial markets [1].

The allegations against Gill stem from his actions during the 2021 GameStop short squeeze. The plaintiffs, led by Martin Radev, claim that Gill manipulated GameStop securities between May 13 and June 13 by quietly accumulating large quantities of stock and call options. They argue that he then dumped some of his holdings after emerging from a three-year social media hiatus, causing the stock's price to gyrate wildly and generating "millions of dollars" in profit for himself at their expense [1].

Gill is no stranger to using social media to boost GameStop's stock price. On May 12, he posted a cryptic meme on the social media platform X that was widely seen as a bullish signal for the company. This post contributed to a surge in GameStop's share price, which more than tripled over the next two days but gave back nearly all the gains by May 24 [1].

On June 2, Gill revealed that he owned 5 million GameStop shares and 120,000 call options. However, he shed the call options on June 13 and owned 9 million GameStop shares at the time of the lawsuit's filing [1].

While the allegations against Gill are serious, the lawsuit was dropped within days of its filing for reasons that are unclear [2]. The case serves as a reminder of the potential power of social media influencers in the stock market and the importance of transparency and regulation.

References:

[1] Reuters. (2024, July 1). Roaring Kitty is sued for alleged GameStop manipulation. https://yro.slashdot.org/story/24/07/01/2126206/roaring-kitty-is-sued-for-alleged-gamestop-manipulation
[2] Fortune. (2024, July 1). Gamestop stock investor lawsuit dropped against Keith Gill, Roaring Kitty. https://fortune.com/2024/07/01/gamestop-stock-investor-lawsuit-dropped-keith-gill-roaring-kitty-pump-and-dump/