Keith Gill, the stock market influencer known as “Roaring Kitty” and “DeepF-Value,” who amassed millions of followers on X and Reddit thanks to GameStop, was briefly hit with a lawsuit accusing him of knowingly deceiving his loyal followers to reap millions of dollars in profits. The lawsuit was voluntarily dismissed by the plaintiff, Martin Radev, on July 1.
The proposed class action lawsuit was filed Friday by Radev, a GameStop investor who accused Gill of organizing a “dumping scheme” that artificially inflated the price of GameStop shares between May 13 and June 13. As a result, thousands of investors may have been harmed, including Gill’s supporters, Radev’s complaint alleges, while speculating on the size of the class. On Monday, Radev asked the court to dismiss the lawsuit without prejudice.
Radev’s complaint follows reports that E-Trade considered banning Gill over suspicions of stock market manipulation, but apparently feared a backlash from Gill’s stock meme army. According to the aggrieved investor, Gill’s scheme allegedly worked as follows:
“Unbeknownst to investors,” Gill “quietly purchased a large volume of GameStop call options on E-Trade at relatively low prices.” He then “reignited the meme stock movement” he first sparked in 2021 by posting a meme on May 12 showing a suited gamer sitting up in his chair. That and subsequent meme posts, along with the sharing of allegedly misleading information about his GameStop holdings, triggered two trading spikes that sent GameStop shares soaring. Then, on June 13, Gill “quietly sold” or “abandoned” his “120,000 GameStop call options for a large profit” and only afterward informed investors and his “millions of followers” that “his own stake in GameStop stock had increased by over 4 million shares.”
Radev said Gill should have disclosed his stake a month earlier to investors, who would have “suffered significant losses and damages” due to artificially inflated prices.
Given that Gill is “an American financial analyst and investor, and a former financial analyst at Massachusetts Mutual Life Insurance Company,” Radev alleged that Gill “also had actual knowledge of the misleading nature of the information he disseminated and/or disseminated.” Furthermore, he allegedly “acted in reckless disregard of actual information known to him at the time” when his online posts caused GameStop’s stock price to soar by 179%.
Radev alleged that Gill used his X account “as a gimmick to deceive and defraud investors.” Because Gill did not disclose his large purchase of call options prior to his memestorm, Gill allegedly concealed “what would have been his clear intention to drive up the price of GameStop shares for his own benefit,” Radev alleged. This information would have deterred savvy investors from buying call options during Gill’s alleged scheme, Radev alleged.
In demanding that Gill be released from all ill-gotten gains, Radev asked the jury to agree that Gill “disseminated and disseminated materially false and misleading information” for the “purpose of inducing” Radev and others to purchase GameStop securities. He is also seeking damages for all GameStop investors who purchased securities at allegedly illegally inflated prices during the month that Gill posted the meme. But the lawsuit has since been closed, before any other plaintiffs in the proposed class could join.
Neither Gill’s nor Radev’s legal team immediately responded to Ars’ request for comment.
This article has been updated to reflect that the lawsuit has been voluntarily dropped.
News Source : arstechnica.com
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