Meme stock icon “Roaring Kitty” allegedly deceived his millions of internet followers with a “pump-and-dump” scheme by revealing his position in video game retailer GameStop without disclosing when he bought the options, according to an explosive class action lawsuit.
Keith Gill, the former MassMutual financial analyst who sparked the meme stock frenzy of 2021 using his Internet alter ego Roaring Kitty, has been sued for securities fraud by several GameStop shareholders in Brooklyn federal court.
Gill “engaged in a dumping scheme” by posting a Reddit post in which he “belatedly disclosed” to investors on June 13 that he had accumulated a substantial stake in GameStop, according to the complaint filed Friday.
In a Reddit post on June 2, Gill announced a $116 million bet on GameStop, sending the company’s stock price up as much as 75%.
Gill attached a spreadsheet showing he purchased 120,000 GameStop call options and 5 million shares of the company’s stock.
According to the lawsuit, Gill “quietly sold and/or exercised” all 120,000 call options for a significant profit “seemingly to increase his own stake in GameStop stock by over 4 million shares.”
He revealed that he “abandoned” the 120,000 call options on June 13.
Gill posted another screenshot of his E-Trade portfolio showing he owned 9.001 million shares of GameStop and more than $6 million in cash.
GameStop shares were trading at around $22.90 before noon Monday, meaning Gill’s stake in the company is worth around $206.1 million.
The Post sought comment from Gill and attorneys representing the plaintiff.
Eric Rosen, a Boston-based attorney who is not involved in the case, told the Post that the lawsuit does not appear to have merit.
He said “Roaring Kitty’s” social media posts were “completely harmless.”
“I don’t think he had an obligation to disclose his stock sales,” Rosen said, emphasizing that Gill is neither a fiduciary nor a financial advisor.
“Everyone knows that if you buy options with a call date that’s fast approaching, you’re going to liquidate them,” he said.
Last month, the Wall Street Journal reported that E-Trade was considering banning Gill from its platform over concerns he was involved in stock market manipulation.
The Post has reached out to E-Trade for comment.
Gill filed disclosure forms with the Securities and Exchange Commission on Monday showing that he has acquired a 6.6% stake in online pet supply retailer Chewy.
The filing comes just days after the investor posted an uncaptioned photo of a puppy on social media platform X.
Chewy’s stock price rose as much as 12% in premarket trading before falling more than 4% in after-hours trading.
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News Source : nypost.com
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