Meme stock icon “Roaring Kitty” allegedly defrauded millions of internet followers with a “pump-and-dump” scheme by revealing her holdings in video game retailer GameStop but not revealing when she bought the options, according to a shocking class action lawsuit.
Keith Gill, the former MassMutual financial analyst who used his internet alter ego “Roaring Kitty” to create a meme stock craze in 2021, has been sued for securities fraud by several GameStop shareholders in Brooklyn federal court.
Gill “engaged in a pump-and-dump scheme” and “belatedly revealed” it by posting a post on Reddit.[ed]According to the complaint filed Friday, he warned investors on June 13 that he held a significant amount of GameStop shares.
In a June 2 Reddit post, Gill announced he was betting $116 million on GameStop, sending the company’s shares soaring by 75%.
Gill attached a spreadsheet showing he purchased 120,000 call options on GameStop and 5 million shares of the company.
According to the lawsuit, Gill “secretly sold and/or exercised” all 120,000 call options to make a large profit, “appearing to increase his holdings of GameStop stock by more than 4 million shares.”
He disclosed the fact that he “sold” 120,000 call options on June 13th.
Gill posted another screenshot of his E-Trade portfolio, showing he owns 9 million 1,000 shares of GameStop stock and more than $6 million in cash.
GameStop shares were trading at about $22.90 as of noon on Monday, valuing Gill’s stake in the company at about $206.1 million.
The Post has reached out to Gill and the plaintiffs’ attorneys for comment.
Eric Rosen, a Boston-based lawyer not involved in the lawsuit, told The Washington Post that the suit appears to be without merit.
He said the social media posts made by “Roaring Kitty” were “totally harmless.”
“I don’t think he had any obligation to disclose the stock sale,” Rosen said, noting that Gill was not a fiduciary or financial adviser.
“If you buy an option with a call date approaching, [then] “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 that he was engaging in stock price manipulation.
The Post has reached out to E-Trade for comment.
Gill filed a disclosure document with the Securities and Exchange Commission on Monday showing he owned a 6.6% stake in online pet supplies retailer Chewy.
The filing comes just days after the investor posted a captionless photo of a puppy on social media platform X.
Chewy’s shares rose as much as 12% in premarket trading but fell more than 4% after the open.
With post wire
