Gushiken Yona
Roaring Kitty, also known as Keith Gill and by his online moniker “DeepFuckingValue,” is back in the headlines as a new lawsuit accuses him of market manipulation during the notorious GameStop trading frenzy.
A proposed class action lawsuit filed in the Eastern District of New York on June 28 alleges that Gill orchestrated a pump-and-dump scheme to manipulate the price of GameStop (GME) securities.
The plaintiff, Martin Radev, claims that Gill used his significant social media influence to artificially inflate GME prices, then profited from selling his holdings. The lawsuit focuses on Gill’s actions between May 13, 2024, and June 13, 2024, a period during which Gill, after a three-year hiatus from social media, strategically posted cryptic messages on Twitter and Reddit, hinting at renewed interest in GameStop. These posts allegedly triggered a buying frenzy among his followers, driving up GME prices. Gill then publicly disclosed his significant holdings in GameStop, further fueling the rally.
The lawsuit contends that Gill had been quietly accumulating GameStop options before his social media campaign. It cites a Wall Street Journal report indicating that E*Trade, Gill’s brokerage platform, was considering banning him due to concerns about potential market manipulation. Subsequent revelations that Gill had sold his options during the price surge led to a sharp decline in GME’s stock price.
Gill is accused of violating sections of the Securities Exchange Act of 1934, including those prohibiting market manipulation and insider trading. The lawsuit seeks damages for investors who purchased GameStop securities during the specified period and suffered losses due to Gill’s alleged actions.
While the lawsuit raises significant questions about the role of social media influencers in financial markets, Crypto Twitter has been vocal in its defense of Gill. Many argue that the lawsuit is unfounded and represents a misguided attempt to penalize a retail trading icon.
“RK did not commit securities fraud (IMO). Did he know what he was doing? Absolutely. But, he never traded on any material non-public information. He never made false claims about his GME positions or about GME the company. RK did exactly what well-known investors, analysts, and short sellers do all the time… He took a position and then openly disclosed it. That’s it,” said @FinancewithPaul, a former stockbroker.
Alex Thorn, Galaxy’s Head of Research, also weighed in, saying, “ha the plaintiff in the proposed class action against roaring kitty cited an X post about the GME Solana meme coin as one of the examples that people took kitty’s sit forward post to mean buy the GME equity. don’t think they know about memecoins.”
Another notable comment came from @wagiecapital, an X account that provides long/short commentaries on public markets: “This is hilarious – the guy bringing the suit literally owned 35 shares of the stock, 2 call options, and a put (which he made a $2 profit trading).”
This case puts a spotlight on the ongoing debate about the regulation of meme stocks and the actions of retail investors. It raises questions about how much influence social media figures should have over financial markets and whether their actions can be considered market manipulation. The outcome of this lawsuit could set a precedent for future cases involving social media influencers and market dynamics.
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Yona has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is an official media and publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
