Keith Gill 'Roaring Kitty' Sued For Allegation Of GameStop Share Manipulation
Keith Gill, a shareholder known as Roaring Kitty,' is back in the spotlight after facing a lawsuit related to the alleged pump and dump' scheme on GameStop (GME) shares. The lawsuit was filed on June 28 at the New York Eastern District Court and accused Gill of manipulating GameStop's share price through a number of posts on social media between May and June 2024.
According to the lawsuit, Gill allegedly used his influence on social media to manipulate GameStop's share price for personal gain. The lawsuit states that Gill started buying the GameStop call option at Etrad on May 12, 2024, at a relatively low price. The next day, he made a post on social media X for the first time in nearly three years, increasing the value of GameStop shares.
On June 2, 2024, Gill posted a post on Reddit revealing his holdings in GameStop securities, including 120,000 call options and 5 million shares. This post saw GameStop's share price soar, with its closing over 45 US Dollars (around Rp737,010) that day. On June 13, 2024, Gill revealed that he had used all the 120.000 call options, resulting in profits which were then used to increase his GameStop shareholding to more than 4 million shares.
Plaintiff Martin Radev claims that he suffered financial losses due to alleged manipulations by Gill. Radev bought 25 GME shares and three call options in mid-May, influenced by Gill's post. The lawsuit accused Gill of failing to disclose his intention to sell his options, thus misleading investors and causing financial losses.
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However, not all legal experts believe that this lawsuit has a solid basis. In a blog post on June 30, former federal prosecutor Eric Rosen argued that this class action lawsuit was failed from the start. Rosen suggested that Gill could easily rule out the case with a well-designed motion.
Quoted from Crypto Potato, Rosen explained that the expectations for Gill to express his intention to sell his options are unreasonable, because there is no normal investor' who expects a trader to hold options until the expiration date.
"The tweet from the meme stock icon is not something that a reasonable 'investor' will take into account who reads income reports and analyzes company news' when making decisions to buy or sell stocks," Rosen wrote. It doesn't make sense to buy securities just because someone named Roaring Kitty posted harmless tweets on social media.
Rosen also argues that the plaintiff's claim relies on the assumption that Gill's social media posts directly affect their investment decisions, which will be difficult to prove in court.