Roaring Kitty Sued Over GameStop Pump-and-Dump Allegations

CryptoNews.com · 2024-06-30T21:07:29+00:00

Roaring Kitty, aka Keith Gill, has been accused of securities fraud in a class-action lawsuit over GameStop. Gill is accused of posting on social media and inflating GameStop's stock prices, resulting in losses for other investors. The plaintiffs are seeking a court trial. Gill gained notoriety in 2021 as a central figure in the GameStop short squeeze, testifying before Congress about his investment in the company.

CryptoNews.com

2024-06-30 21:07:29

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Shalini Nagarajan

Last updated:

July 1, 2024, 01:07 EDT | 1 min read

Keith Gill, known as Roaring Kitty, has been accused of securities fraud in a class-action lawsuit concerning GameStop. The lawsuit alleges that his social media posts caused volatility in GameStop stock prices between May and June.

This complaint was filed on June 28 in New York’s Eastern District against Gill, known for his involvement in the 2021 GameStop short squeeze.

In May, the trader made his first meme posts on his X account in three years. The filing notes that this post was seen as Gill re-engaging with GameStop securities.

Then, in early June, he disclosed a significant stake in the company through a Reddit post. He revealed owning 5m GameStop shares and 120,000 GameStop call options with a strike price of $20. This led GameStop shares to surge over 70% in early premarket trading on June 3.

Roaring Kitty/Deep Fucking Value is being sued for securities fraud. This is a class action lawsuit, filed by a person who bought GME at what they claim was an artificially inflated price.

— Chairman Birb Bernanke (@Bonecondor) June 30, 2024

Roaring Kitty Faces Legal Battle for Alleged GameStop Market Manipulation

Further, the lawsuit alleges that Gill tried to inflate GameStop’s stock prices. Shortly afterward, E-Trade reportedly considered removing him from its platform due to stock manipulation concerns.

Then, on June 13, Gill disclosed the purchase of an additional 4m GME shares valued at $262m.

Subsequently, the plaintiffs argued that Gill participated in a pump-and-dump scheme, resulting in losses for other investors.

“[Gill] circulated and disseminated the false and misleading information with the purpose and to the effect that the price of GameStop securities would or was likely to rise,” the complaint reads. Now, the plaintiffs are seeking a court trial.

However, litigation boutique Dynamic LLP believes the case has a weak foundation. It is likely to be thrown out if Gill challenges it with a strong legal defense, it said.

From Reddit to Congressional Spotlight

So who is Keith Gill?

In 2021, Gill, a financial analyst turned Reddit investor known as “Roaring Kitty,” became a central figure in the GameStop short squeeze.

He claimed the video game retailer was undervalued. The trader fueled a surge of retail investor interest in the stock via his posts on Reddit’s r/wallstreetbets. Ultimately, this sent the stock’s price soaring 1600% and squeezed hedge funds betting against it.

Gill later testified before Congress, reiterating his stance as a passionate investor who saw value in GameStop.

GME0,07%

PUMP6,54%

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