Meme stock icon “Roaring Kitty” allegedly duped 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 a bombshell class-action lawsuit.
Keith Gill, the former financial analyst for MassMutual who sparked the meme-stock frenzy in 2021 by using his internet alter-ego Roaring Kitty, was slapped with a securities fraud suit by several GameStop shareholders in Brooklyn federal court.
Gill “engaged in a pump-and-dump scheme” by posting an item on Reddit in which he “belatedly reveal[ed]” to investors on June 13 that he amassed a considerable stake in GameStop, according to the claim, filed Friday.
In a June 2 Reddit post, Gill announced a $116 million bet on GameStop – sending the company’s stock price soaring by as much as 75%.
Gill attached a spreadsheet showing that he had bought 120,000 GameStop call options and 5 million shares of company stock.
According to the lawsuit, Gill “quietly sold and/or exercised” all of the 120,000 call options for a large profit “seemingly to increase his own stake in GameStop stock by over 4 million shares.”
He revealed the fact that he “dumped” the 120,000 call options on June 13.
Gill posted another screenshot of his E-Trade portfolio showing that he owned 9.001 million shares of GameStop and more than $6 million in cash.
GameStop shares were trading at around $22.90 as of Monday before noon – meaning that Gill’s stake in the company is worth around $206.1 million.
The Post has sought comment from Gill and the attorneys representing the plaintiff.
Eric Rosen, a Boston-based attorney who is not involved in the case, told The Post that the lawsuit doesn’t appear to have merit.
He said that the social media posts by “Roaring Kitty” were “completely innocuous.”
“I don’t think he had any duty to disclose his stock sales,” Rosen said, noting that Gill is not a fiduciary or financial adviser.
“Everybody knows if you’re buying options with a rapidly approaching call date, [then] you’re going to be liquidating them,” he said.
Last month, The Wall Street Journal reported that E-Trade was considering possibly kicking Gill off of its platform due to concerns that he was engaged in stock manipulation.
The Post has sought comment from E-Trade.
Gill on Monday filed disclosure forms with the Securities and Exchange Commission showing that he had amassed a 6.6% stake in online pet goods retailer Chewy.
The filing comes just days after the investor posted an uncaptioned picture of a puppy on social media platform X.
Chewy’s stock price rose by as much as 12% in pre-market trading before falling more than 4% after the opening bell.
With Post Wires
Credit: Source link
