Keith Gill, a Massachusetts financial educator, turned YouTuber into the basement of the popular Reddit hero for his early investment in GameStop before a massive increase – and subsequent decline – in the company’s stock was sued in a class action lawsuit. .
The lawsuit, filed in federal court in Massachusetts, claims that Gill “took over the fake person of an everyday, amateur guy who simply looks at the little guy,” in order to recruit short-term investors, thus constituting a securities fraud. .
Gill – which has more than 400,000 subscribers to its YouTube account, Roaring Kitty – acted as a securities broker for Massachusetts Mutual, according to the lawsuit.
When a user called DeepFuckingValue published his first post on Reddit forum r / WallStreetBets in September 2019, did not make too many waves on a forum where retailers often share their bets and losses strange actions. “Holy, brother, what made you get rid of 53K on the gamestop?” commented a user.
At the time, the shares of the video game store were trading at about $ 5 per share. However, Gill, then posted anonymously to his account, continued to share his updates; and Reddit retail investors, along with some hedge funds, soon jumped on the bandwagon. As of January, GME shares in dollars were trading at just under $ 500 per share, with Gill’s initial investment reaching a payment of up to $ 48 million, according to the lawsuit.
A post Gill wrote on January 27 about his maximum earnings, “is full of [WallStreetBets] Users recount how Gill not only encouraged them to buy GameStop shares, but continued to inspire them to hold their shares so as to manipulate the market to ensure a loss for those in short positions, ”the lawsuit reads.
The main plaintiff in the lawsuit, a Washington State man named Christian Iovin, “used about $ 200,000 as collateral to sell call option contracts for GameStop shares when the shares were below $ 100,” the lawsuit said. Iovin and his lawyer, Reed Kathrein, declined to comment on the article.
On his YouTube channel, where he offers “live educational streams in which I share my daily inventory tracking and investment research routine,” Gill has repeatedly directed viewers to a short-term potential of the GameStop stock, in which investors buy an action against which they are bet. Of the 80 videos on Gill’s channel, 56 refer to GameStop, it is shown in the process.
The lawsuit also names MassMutual, Gill’s former employer, as the defendant, claiming that the insurance company had “legal and regulatory obligations to supervise Gill to prevent such conduct.”
Conformable Wall Street Journal, Gill resigned from his job at MassMutual on January 28, the day after he paid his tip and the day before his first public interview, also with diary, it was published.
Gill’s actions also attracted the attention of state and federal officials. William Galvin, the Commonwealth Secretary of Massachusetts, issued a subpoena against Gill earlier this month to investigate whether his day-to-day work affected his trading, according to New York Times.
MassMutual said Times that he didn’t know about Gill’s trading until he resigned on Jan. 21 and asked him to stop if he knew. MassMutual did not immediately respond to a request for comment on this article.
Gill is due to testify on Thursday, along with the executive directors of Reddit and Robinhood, at a congressional hearing on stock growth organized by Rep. Maxine Waters (D-CA), Chair of the House Financial Services Committee.
In prepared remarks released Wednesday before his testimony in Congress, Gill denied any wrongdoing.
“The idea that we used social media to promote GameStop shares to involuntary investors is absurd,” Gill’s remarks read. “I was very clear that my channel was for educational purposes only and that my aggressive style of investing is unlikely to be appropriate for most people who check the channel.”
GameStop investors also filed a class action lawsuit against the Robinhood trading app last month after restricting transactions to GameStop and other popular shares on r / WallStreetBets, sending Redditors and app users into a crisis.
You can read the process here.