Reddit trader Roaring Kitty sued for securities fraud over GameStop market rally

Source: Keith Gill

 

Keith Gill, better known by his online alias Roaring Kitty, is being sued for securities fraud due to his role in the GameStop market frenzy instigated by the WallStreetBets subredditThe suit also named Gill's former employer Mass Mutual as a defendant, arguing that Mass Mutual had supervisory responsibility over Gill's market activity.

 

The class action lawsuit was filed by Christian Iovin in the U.S. federal court of Massachusetts, and alleges that Gill was a licensed securities expert who impersonated an amateur stock investor in order to illegally manipulate the market by using WallStreetBets and other social media platforms to artificially inflate the value of GME stock. 

 

 

According to the lawsuit, Gill was a financial analyst with broker licenses, who previously worked for Massachusetts Mutual Life Insurance Co. He became a central voice in the social media driven GameStop rally that occurred in January, which pushed GME to a nearly 1700% rally in a single month. The squeeze resulted in massive losses for hedge funds that shorted GME, and dominated the financial news for multiple weeks.

 

“Gill fashioned himself as a kind of Robin Hood and characterized securities professional as villains,” explained Iovin’s legal team in the overview to the lawsuit. “Gill slyly targeted large hedge funds who had shorted GameStop stock as the evil, powerful big boys. He incited a market frenzy by advocating revenge on the big hedge funds by buying GameStop shares to drive up the price and “squeeze” short-sellers who would be forced to cover their short positions at greatly inflated prices.”

 

The suit is seeking damages for the traders who shorted the stock and lost money, as well as for those who joined the GME buying frenzy at its height and lost large sums of capital when GME’s value went back down.

 

Gill is also scheduled to testify before the House Financial Services Committee on Thursday, as part of an inquiry into the situation. He will appear alongside executives from Robinhood Markets, Citadel LLC, Melvin Capital Management, and Reddit.

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